Trucking Sheds 7,500 Positions in October
This story appears in the Nov. 16 print edition of Transport Topics.
The trucking industry shed 7,500 more jobs in October, more than double the 3,600 lost in September, according to the U.S. Bureau of Labor Statistics.
The October loss was the largest for trucking since June, when 7,900 jobs disappeared, although not as dire as the totals earlier this year, when about 17,000 jobs a month were lost.
“Until the consumer regains confidence and starts spending money,” said Charles Clowdis, a trucking analyst with IHS Global Insight, “replacing things that need to be replaced, unleashing some of the pent-up demand, factories aren’t going . . . back to work.”
At the same time trucking job losses spiked, the nation’s unemployment rate reached 10.2% in October, up from 9.8% in September and the highest rate in more than a quarter-century, BLS said in its Nov. 6 report.
October payroll cuts left 190,000 more Americans jobless, BLS said.
So far this year, the global economic recession has cost the trucking industry more than 92,000 jobs, on top of 79,600 lost in 2008.
Clowdis said that until consumer demand picks up, raw materials will not move from their sources to the plants, nor goods to distribution centers or to retailers, which hurts trucking.
“There’s a truck involved in every element of that,” said Clowdis, managing director of IHS Global Insight’s North America commerce and transport advisory services.
According to the BLS report, the sectors that experienced the most job losses in October — manufacturing, construction and retailing — are all closely related to trucking. Retailing lost 40,000 jobs in October, BLS said.
The job losses spiked in October, after the monthly losses slowed this summer to as few as 3,400 in August.
Bob Costello, chief economist for American Trucking Associations, said that, despite the jump in job losses last month, the trucking industry has reason to be optimistic.
The October spike pales in comparison with the 17,500 jobs lost in trucking in January, the 13,600 jobs in March and the 17,100 jobs in April, he said.
“These things aren’t going to flow in some nice little even lines,” Costello said of the anticipated economic recovery.
“Since May of this year, [the job loss] has been at a much lower range,” he added. “Yes, we’re at the higher end of that range but at a much lower range than we saw last December through April,” Costello said.
John Coughlin, a trucking analyst with the Bureau of Labor Statistics, shared Costello’s perspective.
“The same thing is happening with the value of shipments and truck tonnages,” Coughlin said. “It’ll pick up one month and it’ll go down the next month.”
Unfortunately, Coughlin said, when the federal government officially declares the recession over, many people will not feel relief because they still will be jobless in various industries, including trucking.
“Sales have to go way up in order to get the inventories down,” Coughlin said, “and that’s what it’s going to take for trucking to pick up, because they need to actually deliver stuff.”
Clowdis, of IHS Global Insight, said he is not confident that the economy will be robust anytime soon, given the October jump in job losses.
He is worried, he said, that the mood in trucking may have been overly optimistic this summer. The federal job stimulus money and the Cash for Clunkers incentive program may have buoyed the economy for a short time.
The economy’s inability to inspire consumer confidence is troubling for trucking, Clowdis said, and the recession may have produced fundamental changes.
People are saving now instead of spending, he said, and distributors and retailers have learned to live with smaller inventories.
Clowdis said one well-known retailer told him that it no longer bothers to rush shirts from Chinese factories to its stores in the United States.
After flying in the shirts for years, “they put them on the water,” he said. The shirts now take 21 days instead of two to arrive, but the retailer told him, “We don’t see the demand coming back,” Clowdis said.
