Trucking Sheds 24,900 Jobs

By Sean McNally, Senior Reporter

This story appears in the Feb. 16 print edition of Transport Topics.

The trucking industry lost nearly 25,000 jobs in January, the highest monthly total ever except during a national strike in 1994, according to data from the Department of Labor.

Dismal freight volumes caused carriers to cut back, and the trucking employment drop of 24,900 contributed to the 598,000 total the Labor Department reported for January, as the national unemployment rate jumped to 7.6% from 7.2% in December.

“All of last year, we lost just under 73,000 [trucking jobs] . . . so that’s a third of what we lost all of last year in one month,” Bob Costello, senior economist for American Trucking Associations, told Transport Topics.

The only month in history when more jobs were lost in the trucking industry was April 1994, when a Teamsters strike led to the loss of 49,400 jobs.

The recession has caused trucking to shed jobs in 12 of the past 13 months for a total employment loss of 106,100, the Labor Department said.

The agency said the January jobless rate was 8.4% in the transportation and utilities industries — the category that includes trucking.

Costello said the January employment cuts were “a direct result” of the historic drop in freight volume suffered at the end of 2008 (2-2, p. 1; click here for previous story).

“When truck tonnage dropped as much as it did in December, I think we came into January and fleets said: ‘We need to shrink even more,’ ” Costello said.

Several of the large less-than-truckload carriers announced job cuts in late January, including 1,100 layoffs by Arkansas Best Corp. (2-2, p. 5).

Last week, FedEx Freight cut 900 jobs, or 2.6% of its workforce, because of declining demand and “aggressive” pricing by competitors.

“There has been greater than anticipated deterioration” in shipments, Maury Lane, a FedEx spokesman, told Bloomberg News. “The pricing environment has become even more aggressive, as the same number of carriers compete for a shrinking base of business.”

Costello said employment data were “a lagging indicator, it’s not a leading indicator” and that anecdotally, January was not much better for trucking than December had been.

“I wouldn’t expect [employment] to go up” in February, Costello said. “Will it be as bad as January? It’s hard to say. It depends on what attitude fleets took . . . [and] if they were really aggressive in their cuts.”

Keith Hall, commissioner of the Bureau of Labor Statistics, told the congressional Joint Economic Committee Feb. 6 that the national labor market weakened “dramatically” in January. Since the recession began in December 2007, he said, the United States has lost 3.6 million jobs, with about half the drop “in the past three months.”

The Labor Department said two sectors of the economy that provide a great deal of business for trucking — manufacturing and construction — were also especially hard hit by job losses in January.

Hall said payrolls in manufacturing, a major source of trucking freight, fell by 207,000 during January, “bringing the job loss in this industry to 1.1 million since the start of the recession.”

There were “especially large” declines in metal products, which lost 37,000 jobs; motor vehicles and parts, which lost 31,000 jobs; and machinery manufacturing, which lost 22,000 jobs, he added.

Construction job losses were less severe, as that sector shed 111,000 jobs for a recession-long total of 781,000 “with about 40% of the decrease occurring in the past three months,” Hall said.

Ken Simonson, chief economist for the Associated General Contractors of America, said the report, particularly the poor performance of the construction industry, “underscores the urgency of implementing a job-boosting economic stimulus package focused on infrastructure.”

“In the past 12 months, nonresidential builders and specialty trade contractors, along with heavy and civil engineering construction firms, have had to lay off 309,000 workers, or nearly 7% of their workforce,” Simonson said. “Many of these workers would be re-employed within weeks if Congress passes a stimulus bill with at least $150 billion of construction spending.”

Costello, however, said the stimulus package was unlikely to reverse some of the declines in trucking employment.

“There’s some individual companies that will get a bump . . . but it doesn’t save the day,” he said. “We won’t all of a sudden start growing employment because of the stimulus.”