I’ve been sitting here in Gary, Indiana since last night trying to get a load out of here. I ran a load from Indianapolis up to Chicago yesterday, then picked up one in Chicago last night and dropped it here. This is *supposed* to be the busiest time of year for freight — and if it truly is, then the thought of what it’s going to be like in January is downright scary. The good news is, my truck was paid off years ago, so I can at least (theoretically) survive, but I feel sorry for everybody making those easy weekly payments on their trucks. For the uninformed, truck payments usually run in the range of about $400 a week for a used truck, and can top $1000(!) per week for a new one. Throw in all of the fixed costs, and what you have is a recipe for financial disaster. Several thousand(literally) trucking companies have gone out of business in 2008, and ’09 doesn’t look much better. While a lot of them are small, some notable large companies have gone under too.
At least diesel prices have been dropping. I filled up a few months ago, and it was $980+ for a tankful — which lasts about a day and a half or so. Now, that same tankful would be around $400 for the same amount. There’s not much freight, but at least fuel is cheap. Unfortunately, with everyone fighting over what little freight there is, freight rates have dropped dramatically. Talking to my “travel agent” the other day, she told me that on some lanes, prices have dropped to 60-80 cents a mile. Not what you would call particularly profitable. It costs around 85 cents a mile or so just to pay a driver and buy fuel, so this does not bode well for the industry.
I was also told that some markets (like Florida) which are always notoriously bad even in good times, have turned horrendous. Florida is a net consumer — they receive *far* more freight than they ship, so getting a load out of Florida (especially the southern part of the state) is now almost impossible — and even if you find a load out, it frequently won’t even cover fuel costs.
Truck freight is an extremely sensitive indicator of how the economy is doing. Almost everything is transported by truck, for at least a portion of the journey from producer to consumer. If trucks aren’t moving freight, then this is a really bad sign for the economy. Based on how I’m seeing freight, never mind being in a recession — we’re in a depression — and a deep one at that.