With a 35-month downhill roll, recession taking toll on truckers in Minnesota and nation

Truckers are what move the vast majority of goods in the U.S. economy, and the current deep recession has been crippling the nation’s trucking firms. The economic downturn has caused job losses of historic proportions across the United States and in Minnesota, which has recorded its lowest level of employment in the tough-to-measure sector in a decade.

“Truck transportation is the major method of moving manufactured goods,” observed John Hausladen, president of the Minnesota Trucking Association. “When we’re not making things, it stands to reason truck transportation is down.”  Although he does not have exact statistics, he acknowledges that his association membership is down and following national trends.

Nationwide, employment within the industry has declined for 35 months, resulting in the loss of 208,000 jobs, or 14.3 percent of employment making job losses during the current recession worse than at any time since the Bureau of Labor Statistics began tracking the data in 1990.

This morning’s news out of the Bureau of Labor Statistics (PDF) shows the nation’s unemployment ratedipping below 10 percent, surprising some analysts, to 9.7 percent in January, with a loss of 20,000 jobs. Not every sector of the economy fared equally, and employment continued to fall in transportation, as well as construction and warehousing while temporary help services and retail trade added jobs nationwide.

Backing up that dismal picture, the American Trucking Associations recently reported seasonally adjusted tonnage hauled by fleet truckers was down 8.3 percent for all of 2009, the largest annual drop since a 12.3 percent plunge in 1982. In one possible hopeful sign, the year ended strong with a 6.6 percent jump for the month of December, compared with December 2008, the first year-over-year increase in 15 months.

The Minnesota Department of Economic Development and Employment (DEED) reports the most recent data available for transportation and warehousing employment in Minnesota, as of June 2009, totaled 92,883, down from more than 100,000 six months earlier and the lowest monthly total recorded, going back to 2000.

And that statistic only measures individuals who work for trucking companies. “It doesn’t capture all the independent truckers,” according to John Berglund, labor market analyst for DEED. “Under Minnesota law, they are not eligible for unemployment insurance, so we don’t even see them” at DEED, Berglund said.

Minnesota had 32,839 trucking companies at the end of 2008, most of which were small independent contractors and locally owned companies, according to the MTA website. The MTA claims that in 2008, the Minnesota trucking industry provided nearly 179,000 jobs, or one of every fifteen jobs statewide. That total included not just drivers but also mechanics, accountants, data processing and safety specialists as well.

Saying he has seen some operators in the state cut their fleets anywhere from 15 to 30 percent in response to lower freight levels, Hausladen said Minnesota’s experience “on most measures is in the middle, not at either extreme when times are good or when times are bad.”

Pointing to the failure in 2008 of Monson Trucking in Duluth, as the most recent large employer to go out of business in the state, Hausladen said he “found some small independent operators were not renewing their membership, and when we tried to track them down … they were out of business.”

He noted the plight of one company that specializes in hauling wind turbines that is sitting on “very expensive capital equipment that’s not moving.” Hausladen said truckers have to be “very adept at trying to find other freight to haul.” He contrasted the situations of a window manufacturer dependent on new construction or home remodeling with that of a food processor who will be a fairly stable source of business for truckers because “people still need to eat.”

Berglund of Minnesota DEED also believes that independent truckers got caught in a cost squeeze. “Fuel is what got them [independent truckers] … when diesel hit $4 a gallon … When revenue is less than expenses, you say, ‘Hmm, I think I’m going to park this thing.’ ” As a result, he sees “a lot of trucks on the highway with For Sale signs.” Berglund also believes that the squeeze on truckers “contributed to the recession … It’s an issue many people don’t think about.”

Following the pattern of previous recessions, employment in trucking peaked in January 2007, 11 months before the official starting point of the current recession, according to the BLS, and has continuously declined since then, even though most economists believe the recession ended sometime last summer.

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Comments (2)

  1. Submitted by dan buechler on 02/05/2010 - 01:15 pm.

    Good article. There is often an interplay with employees between trucking and construction. Both sectors have been hit. Resulting in large numbers of unemployed males. Female unemployment is less severe as they are in secors that are less volatile.

  2. Submitted by Ron Harris on 02/06/2010 - 05:14 am.

    These guys are getting silently slaughtered, just as Warren Buffet buys a railroad and preps for the bounce back in freight. When the turn around comes, the trucking industry will be crippled and the railroads will pick up the pieces. Freight in this country will be controlled by the 4 railroad CEO’s and Wall Street instead of the 188,000+ licensed interstate motor carriers, many of which are smaller carriers that support, live and work in smaller communities. Once the carriers become slaves to the railroad, everybody then feeds into Wall Street. Please support your local trucking company.

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