Longer haul to better times

America's economic comebacks in the past have rolled in on 18 wheels.

Semitrailer trucks ferrying lumber, steel, food and all the goods for building or buying have been the historical signal that the American economy was again firing on all cylinders.

Just as the sight of more trucks carrying more stuff has been a sign of health in an economy based primarily on consumption, the current situation — parked, empty and fewer trucks — has mirrored economic weakness.

Recent manufacturing and housing measures have improved enough to spur talk of a recovery, though some economists caution that such a recovery could be weak and short-lived.

So, as the current recession drags into a 22nd month, it's worth a visit to a local truck stop. Most of the reports: no clear sign of recovery yet.

“This year? Totally worse,” 82-year-old truck driver Vern “Tark” Tarkington said as he dined recently at the Sapp Bros. truck stop cafe in Council Bluffs.

One industry expert wasn't even sure freight transportation would be the bellwether of recovery this time.

The American Trucking Associations' chief economist said inventories remained too high relative to sales in much of the supply chain. Many new product orders could be filled with current inventories, not new production, suppressing truck tonnage, said the association's Bob Costello.

“This time around,” he said, “trucking will not lead like we normally lead.”

But local experts said to keep watching. An executive with Omaha-based Werner Enterprises, the second-largest publicly traded truckload carrier, said he thought trucking would continue to lead in forecasting what's in store for the nation. A spokesman for Omaha-based Union Pacific Railroad thought rail traffic also would be an early measure of economic growth.

Local and national transportation experts agreed, though, on how dismal freight traffic has been.

They predicted some improvement yet this year, thanks in part to the federal cash for clunkers program. But they were not optimistic about any big upward swings, describing a “new normal” of lower future rates of consumption.

Gallup polling had indicated that Americans were watching closely how much they spend. The company's polls from April and June — before Americans loosened their purse strings for the cash for clunkers program — remained consistent that a third of Americans across the income spectrum were saying they would spend less in the years ahead. Six to 8 percent said they would spend more.

About a quarter of those polled said they would save more.

“Even if the economy starts to stabilize,” said Derek Leathers, chief operating officer for Werner, “people may not run into the streets as they have historically and spend themselves into debt.”

Those in the industry also see an ongoing trend of sleeker, smaller machines replacing once-bulky items.

“Smaller is cooler,” Leathers said. “But smaller means less shipments. The traditional big-screen TV is now a flat screen. The boom box is now an iPod. The iPod is now a Shuffle.”

The freight numbers so far are mixed.

For the American Trucking Associations, good news came in July: the truck tonnage index rose 2.1 percent, though that wasn't enough to offset June's 2.4 percent loss in the index. June's total drop in tonnage, 13.6 percent, represented the largest year-over-year decrease since the current recession began, but there was a positive sign. July showed the best year-over-year gain since February.

According to the American Association of Railroads, July marked the ninth straight month that carloads declined by double digits over the same month the year before. July 2009 was 17.5 percent lower than July 2008. But July's drop was not as steep as the declines in April, May or June. So the number of carloads in July was 4,400 higher than in June and 15,000 higher than in May, a sign of carload traffic stabilizing.

U.P., where carloads were down about 22 percent in the second quarter of 2009 compared with the same period a year ago, is especially monitoring any uptick in building commodities such as steel, lumber and concrete, said Tom Lange, U.P. spokesman.

July marked the best month for steel that railroads in general had seen since December. Lumber, still way below last year, at least was higher than in December.

“The bottom line,” Lange said, “is that we have seen some stabilizing ... but it's too early to tell if the economy is on the road to recovery.”

Lange spoke following last week's reports that manufacturing had expanded for the first time in 19 months, driven by demand for new orders and by higher-than-expected sales of existing homes.

“We have to see how the data translate into consumer spending,” Lange said.

Werner COO Leathers said the American Trucking Associations — a group that says trucking won't be a predictor of recovery — considers all inventory, including high-dollar items “that simply aren't moving at any price.” But a large portion of Werner's business is where inventories “are very, very lean right now,” he said.

Leathers said discount retailers and grocery stores were weathering the recession better. It also helps that nearly 40 percent of Werner's trucking business is dry van, and only about 2 percent is the sector doing the worst: flatbeds. Flatbeds haul construction materials, and little uptick had been noted in building activity despite the federal stimulus spending on projects this summer.

Werner has taken some hits: the average number of miles per truck was down about 5 percent for the second quarter of 2009 compared with a year ago and revenue per mile was down 1.8 percent. But Leathers said the company has weathered the recession so far debt-free and without layoffs.

What does all this mean for the truckers in a nation where, as the Sapp shop decals say, “If you got it, a trucker brought it”?

“They're getting killed out there,” said Norita Taylor, spokeswoman for the Owner-Operator Independent Drivers Association, which represents about 156,000 truck drivers. “Shippers aren't wanting to pay very much; there's not enough freight to haul. The pay they're getting offered for loads is anywhere from pitiful to laughable.”

In Nebraska, where truckers have benefited from a relatively strong agricultural sector, “it's still very spotty,” said Nance Harris, vice president of member services for the 650-member Nebraska Trucking Association.

“We hear from our members that you'll have two good weeks and one really bad week in terms of freight,” Harris said. “That's an improvement from spring, when it was two bad weeks to one good week.”

That sentiment was echoed among truck drivers themselves and the many related businesses — such as truck stops, truck dealers and maintenance shops — that rely on trucking's success for their own survival.

Spend time at the Sapp Bros. truck stop in Council Bluffs, just off Interstates 80/29, and you'll hear the same tale.

“Real slow, probably the worst I've had,” said 20-year driver Jeff Loes, who had just dropped a load of cattle at Greater Omaha Packing Co. on a Thursday and didn't think he'd get another load until Saturday.

“Slower than I've ever seen it, and I've done just about anything you can do in trucking,” drawled 37-year driver Chuck Flowers of Georgia.

Maintenance workers at the Sapp body shop say business is down by a third from five years ago.

Across the street, Speedco Truck Lube has suffered a double-digit drop in business as truckers skip $210 “P.M.s”: preventive maintenance checks.

Down the street at the Peterbilt dealership, sales of truck cabs, called tractors, were off by about half, but parts and service sales were up. That signaled to Tom Schoening, spokesman for Peterbilt of Council Bluffs & Omaha, that truckers were following a national trend in thrift: fix it before you buy new.

Waitresses at the Sapp cafe said they were serving fewer truckers: many of the truckers were getting grab-and-go food or cooking in their cabs or stopping at the cafe for coffee but not a meal.

That's what Michael R. Meadows of Augusta, Ga., does. He budgets $4 a day for food on the road. While parked across from Sapp Bros. at the Pilot Travel Center last week, he dined on a hot-plate meal consisting of a can of New England clam chowder ($1.49), rice (37 cents) and crackers (free at the truck stop).

“You have to be more on the conservative side. You can't go out and really splurge like you used to,” said Meadows, 59, who hopes to retire in December. After 36 years on the road, Meadows had planned to retire in April, but the economy kept him on his rig.

“I had to wait,” he said.

The experience isn't unusual in an industry that, already grappling with stiffening environmental regulations that added expense, got hit last year by the double-whammy of high fuel prices (which since have dropped) and a national recession, which still is being felt.

Eric Thompson of the University of Nebraska-Lincoln's Bureau of Business Research said freight is not the only indicator to watch, but history does give merit to the industry's bellwether claim.

For example, truckers saw freight plummet in the first quarter of 2000 — a year before the recession began in March 2001, according to the American Trucking Associations. And eight months before it was declared over in November 2001, freight began to pick up.

But this current recession, which began in December 2007, is lasting longer, hitting harder and proving more difficult for economists to predict.

This time around, Thompson said, the most important indicators could be data hinting at how much the housing crisis, job losses and savings rates have affected buying habits.

“Everybody is worried about the consumer,” he said.

“Everybody” includes a pair of retired over-the-road truck drivers warming a booth on a recent day at Sapp Bros. in Council Bluffs.

Ron Klinker, 70, of Hastings, Iowa, said he's glad his days of hauling steel on a flatbed are over. Tom Hass, 65, of Council Bluffs spent 40 years hauling mostly dry freight. But he's sold one of his tractors and parked the other one.

“No money in it. Ain't no sense running it.”

Driver Wayne Funk wasn't as gloomy. Dining alone at the lunch counter, the trim, clean-cut Kansan said last month he landed his best gig in 35 years: driving a regional route for Wal-Mart.

“It was real slow,” Funk conceded. “All I know is it's picked up, and I hope it stays that way.”

Contact the writer:

444-1136, erin.grace@owh.com

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