Trucking Begins to See Gains from Start of Stimulus Funds

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

Trucking is just beginning to glimpse benefits from the federal economic stimulus program, which could produce about $1.1 billion in carrier revenue over the next two years for moving materials used in infrastructure projects, industry and federal officials said.

Pike Industries, working nine New England road paving jobs totaling $65 million, will need 25,000 truckloads to move 500,000 tons of asphalt for its current American Recovery and Reinvestment Act work, President Christian Zimmermann told Transport Topics.

In Cameron, Mo., Loch Sand and Construction is starting $14.6 million of road and bridge repair that required adding four new trucks and dozens of workers.

Those are among the handful of active projects, with far more currently in the works. As of April 30, the most recent information available, less than $11 million in ARRA highway funds have been paid, according to Department of Transportation statistics. That represents about $1 of each $2,500 available. However, the pace should pick up because one-third of the $26.7 billion has been released to states that disburse the money, the DOT statistics said.

“The full effect on the trucking industry is still a month or two away,” Bill Buechner, senior vice president for the American Road & Transportation Builders Association, told TT on May 12.

Buechner said trucking operators typically receive about 4.3 cents of each highway-spending dollar, which means that trucking revenue from this program should be at least $1.08 billion spread over two years.

“We’ve had a lot of telephone calls from customers wanting to know if we have the equipment and the drivers” to deliver asphalt loads if they win infrastructure project bids, said Barbara Windsor, president of tank carrier Hahn Transportation, New Market, Md.

“It hasn’t turned into business yet, but I’m glad to have the phone ringing,” she told TT during the National Tank Truck Carriers annual meeting last week in San Diego.

Speaking at a May 11 infrastructure conference in Washington, Secretary of Transportation Ray LaHood promised more evidence of stimulus spending will be apparent soon.

“Later this summer, you’ll see thousands of men and women working on these projects, helping our economy and setting the stage for additional investments in our infrastructure,” LaHood said. “We expect hundreds of proposals for new surface and maritime projects that will continue the rehabilitation process.”

However, Bob Costello, senior economist of American Trucking Associations, said trucking has yet to realize stimulus-related benefits.

Individual flatbed and heavy-haul carriers contacted by TT also haven’t reported any stimulus-related business so far. However, other products such as garden supplies have helped them to rebound slightly (see story, p. 3).

“Without the stimulus, it would have been a really tough year,” Zimmermann said. “If we hadn’t had the stimulus work, we would have been looking at laying off 125 people. Instead, we hired about 100.”

The net effect of about 225 positions represents about 20% of the workforce at the Belmont, N.H.-based company, which started 500 miles of paving jobs earlier this month in New Hampshire, Vermont and Maine.

Pike relies on owner-operators and uses about 200 trucks a day.

“We’ve just begun to get these positive [project] reports,” Ken Simonson, chief economist for the Associated General Contractors trade group in Washington, told TT on May 11. “People are going to be unwrapping Christmas presents all year long.”

Responding to a survey, less than 10% of AGC members said they hadn’t yet secured any stimulus-related business.

However quickly it’s spent, stimulus money equals about two-thirds of the Federal Highway Administration’s 2009 budget.

Both Simonson and ARTBA’s Buechner said trucking’s benefit from highway projects extends beyond moving road-related materials and the obvious benefit of improved conditions when the projects are done.

“I think the expectations were way too high as to when this would be turned into jobs in the field,” Simonson said. “Though state DOTs and others may have a long list of ‘shovel ready’ projects, the process has several steps.”

They include advertisements, bid submissions, vendor verifications, bid awards and approvals to start work.

Typically, it takes three to four months from the start of bidding until work begins, Buechner said, but that process is being accelerated this year along with the pace of funding releases from DOT.

“We are just in the beginning stages,” Rob Loch, owner of Loch Sand and Construction Co., Kansas City, Mo., told TT on May 11.

He said the 14-mile job, which includes repairing four bridges on Interstate 35 north of Kansas City, was delayed by late snowstorms and heavy April rains.

Loch will use about 50 workers for the job when it’s in full swing. Right now, the company is completing preparatory work to divert traffic around sections to be repaired. Loch said the company hopes to start road work this week.

Editorial Director Howard S. Abramson and Senior Reporter Sean McNally contributed to this story.