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A brief calm in the metals hauling storm: so far this year, service centers are finding it much easier to locate carriers to deliver orders, but the long-term outlook for metals logistics suggests more tight days are ahead.

Article Excerpt
SERVICE CENTER OPERATORS don't have to scramble as much these days to find a carrier for their steel, aluminum and copper orders. It's become a shipper's market, experts say--at least for a little while.

"We are seeing a bit of a reversal on where the supply-demand equation had been over the last couple of years," says Mark Shary, president of BestTransport.com, Columbus, Ohio. "It's segment specific, even within the metals industry, with certain segments moving more tons. But overall, flatbed carriers are seeing a softening in the demand for trucking."

Some analysts even describe the current market as a "freight recession," One of those is Eric Starks, president of FTR Associates, a Nashville, Ind.-based firm that specializes in forecasting freight transportation needs. His assessment takes into account shipments of all kinds of freight, which have slowed across the board.

"We're in an inverse situation right now, with more trucks than freight," says Larry Hall, transportation director for Heidtman Steel, Toledo, Ohio. "Or at least it's far closer to even."

Steve Williams, president of Maverick USA, Little Rock, Ark., one of the largest steel transport companies in the U.S., says the market started to turn in August 2006 and nose-dived in the fourth quarter. "There's been a steady erosion of profits since then," he adds.

The cause of the freight recession in the transportation sector overall--and the metals industry in specific--is the source of considerable debate. Many analysts point to significant truck purchases at the end of 2006, as fleet owners tried to replace equipment before the expensive new engine emissions standards of 2007 went into effect. Starks says companies may have overbought by as many as 110,000 units in 2006.

But Williams doesn't believe the overindulgence in truck purchases in 2006 is having much of an impact on the...

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