Some Flatbed Fleets See Gains, But Demand Remains Anemic

This story appears in the May 18 print edition of Transport Topics.

Some flatbed carriers said they are seeing scattered volume growth, although weak housing, construction and steel markets continue to dampen demand in the trucking sector that has been hit hardest by the recession.

Eight flatbed fleet managers interviewed by Transport Topics portrayed a second quarter that’s being modestly helped by seasonal spring activity after their markets endured a dreadful first quarter.

Their views were consistent with an American Trucking Associations report on May 12 that found March loads fell 25% from March 2008 and 1.4% from February to the lowest level in 10 years. ATA’s flatbed index was 83.5 as March ended, while dry van stood at 87.8 and refrigerated and tank trucks were above 112.

“We are starting to see small signs of improvement in building materials,” Chris Cooper, chief operating officer of Boyd Bros. Transportation, Clayton, Ala., told TT. “It is very minute, volume-wise. It’s just a small sign of inventory replenishment. There is not any significant growth out there, as far as building is concerned.”

“Capacity is coming out of the trucking industry so fast that we are starting to gain market share from those who went out of business,” Cooper said. “Freight is coming more into balance.”

“Business feels pretty flat, no pun intended,” said Gary Salisbury, chief executive officer of Fikes Truck Line, Hope, Ark. “We see some pockets and glimpses of a recovery. It is not consistent. You may have a good day or a good week, and then the next period will be horrible.”

To illustrate his point, he cited two Arkansas customers, one of which added a shift, while another one nearby closed temporarily because it had nowhere to store products.

“I’m cautiously optimistic that, by the end of the second quarter, we will see some definite rebound,” Salisbury said.

Asked if business was improving, Ed Botchie, vice president of Cressler Trucking Inc., Shippensburg, Pa., said, “The best way I can answer that is: ‘yes and no.’ ”

“Most of our flatbed business was construction equipment and commercial roofing,” Botchie said. “They are still way, way down. As you lose one customer, you look for others. We have seen some strength in other areas, like plastic pipe and vinyl siding. How long that is going to last, I am not sure.”

Gary Harlow, CEO of Home Run Inc., Xenia, Ohio, had a similar view.

“We’ve seen an uptick in the last six weeks, gradually,” he said. “I don’t have a good feeling for whether or not it will be sustained. It’s not great, but it is OK.”

“This is the time of the year that you should see something happening,” Harlow said, tying the pickup to modest inventory replenishment in the home and garden sector. “People ought to be fixing up their gardens and patios.”

Others weren’t as optimistic.

“It is just very spotty right now,” said Craig Stanley, vice president of sales for Tennessee Steel Haulers Inc. in Nashville. “On the whole, we are not seeing a pickup. We haul structural steel, machinery and pipe that all are tied into the construction arena. The integrated steel markets in Chicago, Gary [Ind.] and Cleveland are down because car manufacturing is hurting.”

“In a word, business is terrible,” said Jim Towery, president of Steelman Transportation Inc., Springfield, Mo. “May is better than April. I hope April was the nadir.”

Towery said his company was helped by import moves of steel through Houston’s port that was fabricated in China. An important factor in a recovery is a rebound of domestic production, he said, a view shared by other executives.

“There have not been any signs of recovery yet,” said Michael Card, president of Combined Transport Inc., Central City, Ore. “May volumes look to be improving over April but still are well down from last May. I think we will see an increase this summer to levels that will be only 10% down from last year, instead of the 20% to 25% we have seen the first couple of months.”

“Maybe we will see some improvement in building materials if the $8,000 tax credit for new homebuyers works,” Card said.

“Business is still in decline across the board,” said John Parsons, vice president of Utley Inc., Steele, Mo. “Based on conversations with the companies we do business with, the second quarter of 2010 is what everyone is planning [for resumed growth]. They’re writing off this year.”

Some are seeing a delay in typical flatbed freight patterns.

“We usually see the spike come right after winter,” Stanley said. “It results from people who can finally dig [on-highway projects]. That has shifted to June and July. We are seeing a lot of bid activity.”

“We’re seeing that [postponed shipments] also,” Botchie said. “A lot of it goes back to the do-it-yourself homeowners. That usually moves in March and April, but weather plays a big part in that. The weather didn’t break until recently.”