Life on the Road - Trucking News Blog

I went to the Wal-Mart near Harrisburg, PA and that familiar red bucket and bell ringer was at the door. I don’t know about anyone else, but I feel different this year about that red bucket and other charities. After thanking God for being not only able to work, but working at a fairly decent job and here I am looking to start with a better company, instead of facing no employment at all. I’ve been unemployed before with no prospects or light at the end of the tunnel and it’s not a good place to be.

My wife recently began working as a case manager determining people’s eligibility for food stamps and State assistance. She comes home with a few stories of people trying to scam the system, but there are a lot of people that are truly in need.

More and more people are either having a hard time or have a family member or friend that is having serious problems making ends meet and it’s only going to get worse.

The only answer is we have to take care of each other. This is not the government’s job, no matter what the pinheads in Washington say.

I don’t give as much as I should. I leave decent tips and I’ll fall for some panhandler’s story once in awhile, but I need to do more. I did put a dollar in the bucket and figure I can put in again at the next one. It’s easy to forget that there are people worse off than me, especially when I’m so centered on surviving and getting out of debt myself.  The only thing I can do is to try and do better at giving.

I am not going to go into the idea of this country being in a recession or if one is looming. Some may argue we are already in a recession and some may argue we aren’t. From what I have seen in my humble little town and around the nation is companies are cutting back on expenses. One of the first things to go is jobs the company deems “unnecessary”. Although, I don’t think the job would be there in the first place if it was unnecessary, I can understand some jobs can be absorbed by other departments. The idea of being laid of is a scary one for any person depending on a steady paycheck. Big companies are not immune to these layoffs either. One could argue they are more likely to cut jobs especially if they are a public shared company and are trying to meet a budget by year end.

Being laid off isn’t easy but I think the way it happens can be a shot in the gut. How would you like to receive an email from the CEO of your company telling you that there will be some fairly massive layoffs by the end of the year? That is exactly what happened at Yahoo today. CEO Jerry Yang sent out a mass email to all the Yahoo staff indicating that 10% of the staff would be axed by the end of the year to meet their budget. Seriously, Jerry? You have the gull to give out this terrible news via email. The least you could have done was have department meetings to break the news to the employees.      Read the rest of this entry »

The stock market is currently a giant mess right now.  We saw a 600+ point drop yesterday in the Dow Jones Industrial Average to put it below 9,000 points for the first time since 2003.  You would think hey it’s got to bottom out sometime right?  The Dow took close to a 700 point plunge right after the market opened this morning putting the Dow below 8,000 points.  I can remember not to long ago when the Dow had surpassed 12,000 points for the first time.  This is a massive downturn in the market. 

If you recall from a post earlier this week talking about how the Dow has dropped below 10,000 points this week for the first time since 2004.  It has lost nearly 2,000 more points all in the same week.  Investors have pulled out nearly $50 billion in investments just in the past week alone and they have not invested it elsewhere.  How bad is this going to get before it gets better?  The Federal Reserve made an emergency cut to key interest rates dropping them down to 1.5%.  The government is trying to prevent a recession here, but it doesn’t look like it can be stopped.  Economists yesterday stated that the chance we will be in a recession by next year is now around 80% up from around 60%.  Some economists say we have already hit recession.  The bad part is that this is most likely going to be a consumer led recession. 

So what does this mean for people like you and me?  Well that question depends on lots of factors.  Do you currently have investments in the stock market?  Do you have a retirement account, and if so where are all your funds sitting?  How secure is your job?  Will you be able to keep working or are you in an industry that could be affected by job losses.  Read the rest of this entry »

Even after the signing of the bailout package last Friday by the President the stock market took a massive tumble on Monday.  At some points during the day the Dow Jones Industrial Average had fallen more than 700 points.  It also dropped below 10,000 points for the first time since 2004.  Now I’m sure you are probably thinking why the heck would the stock market continue to fall if the bailout plan has been signed into law.  Well like I said in a previous post it’s not just our economy that is struggling, the economies around the world are to.  With our credit crunch situation it is affecting other countries economies and their economies affect ours.

Europe is facing the same situation we are currently in.  Over the weekend there were talks that Germany would bailout one of their countries largest banks by injecting some $60 billion or so to keep it from failing.  Many banks around the globe are crumbling to the ground and that has a direct effect on our stock market.  In reality things are going to have to get worse before they can get better.  The bailout plan is going to take time for the government to buy the bad debt off of company’s books.  When that happens it is going to take time for the effect of that to start showing in the economy.

The Federal Reserve made a move to help unfreeze the markets.  They just announced a new program to buy loans that are essential to businesses across the country.  This is an attempt to get the markets flowing again.  One of the best things banks, financial companies, and businesses could do right now is to start to conduct business as close to normal as possible.  This is what is going to jump start the economy and the government is trying to do things to inject confidence back into businesses. It is important that investors and companies start to gain confidence that it will be ok and to try and conduct business as usual.

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Bailout Plan click to enlarge

Well it looks like the $700 billion bailout deal has been finalized and did not have the votes to pass the House of Representatives in Congress.  The bill was finished late Sunday night with the speaker of the house stating that no more changes will be made.

Many Americans have been wondering exactly how the bailout plan will work and what exactly it will do.  I think things can sometimes be explained or simplified in some cases with some sort of visual guide.  I found a good representation of the bailout plan and what exactly the US Treasury will be doing on the website of The Wall Street Journal.  Click on the image to enlarge.

The Treasury will hire some people that are experts with debt instruments to help manage the buying of bad debt.  The people will be called the asset managers and will have a variety of duties.  They will be responsible for determining the best way to buy the debt, what type of prices they will be looking for, and how they plan to make the purchases.  As you can see by the image representation the first step in the plan will be for them to list assets that the Treasury will be willing to buy from banks and other financial institutions.  The banks will put a price on the debt they want to sell to the Treasury in the form of bids.  The asset managers will take this information and will start buying the bad debt instruments starting with the lowest bids first.  The goal with this is to take the bad debt instruments off the books of banks and other financial institutions and in turn they will receive cash to recapitalize their business.  This should bring back confidence among financial institutions and help them to resume lending and borrowing money again, hopefully unfreezing the financial system.  Read the rest of this entry »

With the crash of the financial sector last week the U.S. economy is facing extreme danger. Lehman Brothers melted to the ground with the lack of capital to continue operations. AIG was facing the same fate until the government bailed them out by giving them around $85 billion.Merrill Lynch was potentially looking at the same fate as Lehman Brothers until Bank of America swooped in and bought them for $50 billion in stock. Banks across the country are struggling, several banks have already failed, and many are on the brink of failure due to the mass amounts of home foreclosures that are causing billions of dollars of losses. Fannie Mae and Freddie Mac were taken over by the government recently in hopes of preventing their failure. They hold nearly 50% of all mortgages in the United States.

So what does all this mean? Are we headed for the next great depression, are people going to start losing jobs in mass numbers, and is the standard of living for most Americans going to go down? These are just a few of the questions many Americans are asking these days. People around the globe are asking these questions too. Our economy is facing an extreme melt down that will affect everyone if something is not done to stop it.

Have you heard of the government’s $700 billion bailout package? Most people have and most people have an opinion on the matter, which they should. There is one major problem though most of the people that vocally state their opinion don’t have the slightest clue what is at stake. They just know that they don’t want to be spending there hard earned money to bailout wall street and the financial sector because they weren’t part of the problem.

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I’d like to have this badge over on the sidebar, but there isn’t enough room. I thought it looked interesting today because you can see the downward spiral oil has done since the price of gas has been in the political spotlight. The candidates came up with energy plans, the President okays offshore drilling, the Republicans hold their own special session to do something about the price of gas and that makes the Democrats and Obama look bad. Now gas prices drop and come November no one will even remember over $4 dollar gas. And if the public can’t remember $4 gas, you think they are going to remember almost $5 diesel?

It happens every time and we’ve mentioned it here before, that when America looks like their serious about becoming less dependent on foreign oil, the price drops.

If you move your mouse over the 1q 1y 5y the graph changes. This will continue to update no matter when you look at this post, this graph and price will be current.

A blast from the past! Jimmy Carter’s energy plan back in the 70s.

ATA is reporting a slight increase in freigth tonnage two months in a row following three straight months of decline. It appears to be temporary and the experts are predicting decliines in the coming months. So any upturn appears to be only temporary.

Trucking news: ATA says seasonally-adjusted for-hire Truck Tonnage Index is up for second straight month
Jeff Berman, Group News Editor — Logistics Management, 7/31/2008

ARLINGTON, Va.—After three months of declining growth, the American Trucking Associations reported this week that its advanced seasonally-adjusted for-hire Truck Tonnage Index was up for the second consecutive month, with a 1.3 percent increase in June. This rise follows a 0.5 percent gain in May.

ATA Vice President and Chief Economist Bob Costello said in a statement that despite tonnage being up again in June, it is a “close call” as to whether the economy will enter into a recession later this year or significantly slow down. He added that truck tonnage levels may possibly slow down later this year, with the overall economy expected to be weak in the fourth quarter of this year and the first quarter of 2009.

Capacity is the key to those of us that are left. If there are too many trucks going after too little freight, rates drop as truckers take anything to survive. Read the rest of this entry »

Today, millions of diesel users were able to enjoy a sigh of relief. According to the Department of Energy, the national average pump price on diesel decreased by 4.6 cents to $4.718 per gallon. This is the most significant drop on diesel fuel in the last six months. The first decline in three weeks, the new national average proceeds last week’s crude oil slide of well over $16 which ranked diesel fuel $1.829 per gallon higher than it was around the same time last year.

Meanwhile, gasoline dropped 4.9 cents to $4.064 per gallon though it remains $1.106 higher than the average last year at this time. Bloomberg reports that the decrease of both fuels are the result of a major drop in oil prices that occurred last week when the price plunged tremendously from a whopping $145.08 to $128.88 per barrel.

The West Coast region leads the nation in regard to these declines with an average drop of 6.4 cents - California was a major contributor with a decline average of 6.2 cents.

Found this at Dan Goodwill’s blog. Dan has the best technical analysis of trucking on the net. Quoting a truck industry stock analyst, “The freight recession is over.” According to tonnage indices and demand trends, the freight economy is on an upswing.

Don’t start throwing parties yet. Dan goes on -

This view is supported by a number of trucking companies and shippers with whom I have spoken in the past six weeks. Several interesting events have been taking place. They include:

• Carriers are deciding to no longer serve certain accounts (e.g. “firing customers”) and are allocating capacity to better paying accounts.
• Carriers are no longer providing capacity to certain freight management companies either on specific lanes or no longer doing business with these companies altogether
• Carriers are submitting freight bids on specific blocks of traffic and then pulling their bids
• Carriers are submitting rates on designated lanes of traffic and then not showing up to meet with the shipper
• Shippers are finding a tightening of capacity and are experiencing more difficulty covering some of their loads

The upshot of all this activity is that there is a “buzz” in the industry that has not been there for the past year or two. There is an optimism that this incredibly difficult freight drought is coming to an end.

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