Home | Business News | Browse by Publication | M | Metal Center News

Trucking's travails: no steel to haul: with idled mills and moribund shipments throughout the supply chain, trucking companies serving the steel industry face an entirely new challenge.

Article Excerpt
TWO YEARS AGO, the steel hauling industry endured a debilitating driver shortage. Last year, the industry battled astronomical fuel hikes that sent thousands of trucking companies into bankruptcy. Today, the industry is facing a challenge every bit as daunting--an overriding shortage of steel to transport.

[ILLUSTRATION OMITTED]

The recessionary conditions dragging down the North American steel market are having the same effect on the over-the-road transportation companies employed to move steel from mill to service center and from distributor to end user.

"The recession has been extremely hard on our industry," says Clayton Boyce, vice president of public affairs for the American Trucking Association. The Washington, D.C.-based trade organization represents the nation's trucking industry.

A freight recession started to take shape as far back as 2006, though it wasn't until 2008 that the conditions began to take a serious toll on the industry. The rapidly increasing price of fuel, coupled with the overall economy's slide into negative territory, was too much for the industry to absorb.

"It seemed to take about three quarters before we saw a fuel surcharge, and the fuel surcharge that companies were getting did not cover full expenses," says Sandra Moore, director of business development for Toledo, Ohio-based Northern Steel Transport. "We were lucky if it covered a third."

In 2008, more than 3,000 trucking companies with five or more trucks--the minimum-sized companies the industry tracks--went bankrupt. 2008 represented the second-worst year for trucking company failures in the past 20 years, exceeded only by 2001.

The bankruptcy numbers have slowed in 2009 despite the persistently dismal conditions, but capacity continues to dwindle as many of the remaining companies have parked trucks and laid off drivers.

"Capacity will continue to drop," says Patrick Taylor, CEO of BestTransport, Columbus, Ohio. "Already a...