Recovery and Expansion

Amid the gyrations of the stock markets and the television talk-show discussions about a possible double-dip recession, virtually all business signs in the trucking industry show unmistakable movement toward recovery and expansion.

This week’s edition of Transport Topics is full of rosy economic news, ranging from Schneider National Inc.’s decision to hire an additional 2,000 drivers during 2010 to meet new freight business, to continuing growth in heavy-duty truck sales and a marked bump in medium-duty truck sales.

FedEx Corp. also reported a resurgence in its business in its fiscal fourth quarter, as it rebounded nicely from last year’s dismal performance.

Riding a 20% increase in revenue, FedEx earned $419 million in the quarter, compared with the same period last year, when it lost $876 million.

Schneider’s decision to sharply boost its driver force from the 13,000 it had earlier is based in large part on the strong expansion it is experiencing in its regional truckload service, according to company officials.

To illustrate how big a development it is, on the assumption that each driver will run about 110,000 miles a year at about $1.35 a mile in revenue, Schneider’s new driver force by itself could earn some $300 million a year. That sum alone would make the 2,000-driver “company” the 74th largest on the TT 100 ranking of for-hire carriers in the United States and Canada.

The news from Schneider comes at the same time American Trucking Associations released its latest report on industry employment, reporting that large truckload fleets have increased their workforce in the first quarter of this year for the first time in 14 quarters.

While the 0.3% gain ATA reported is small compared with the 15.5% decline in large truckload employment since the third quarter of 2006, it shows that a corner has been turned.

Meanwhile, Class 8 truck sales rose 13.5% in May, compared with year-ago results, while Class 6 sales rose by 135%, indicating that fleets will be looking for more drivers to move those new trucks.

And several analysts warned that the pool of experienced drivers available for hiring is being quickly depleted, an indication that driver pay levels may have to rise in order to attract new candidates.

All in all, it appears that all major economic indicators are pointing to a strong recovery in trucking, a welcome change from the difficult past two years.