 |
| Chicken
Little... |
| Why the Less
Than Truckload "LTL" industry survives. |
| From the RD
News Desk |
| In every economic
downturn "Chicken Little" always shows up to
scream "the sky is falling, the sky is
falling". |
| As of this writing,
here at Road Drivers Weekly News we are happy to report,
the sky is still in place. |
|
|
| In the trucking industry, their is no
insulation from economic cycles. As spending slows, demand for product
shipments naturally slow in return. What goes up, will come down. How far
down is the magical question. |
| The Department of Labor/Bureau of
Labor Statistics reported for the month of February 2008, Non-farm
payroll employment edged down in February (-63,000), and the
unemployment rate was essentially unchanged at 4.8 percent. Sounds a bit
odd that 63,000 jobs were lost (and gained?) but no statistical change
to the unemployment rate existed. |
| How does economic downturn effect the
LTL industry? It's a balancing act that depends on the sales staff being
vigorous in their positions. If truck loads recline, manufacturers still
have product to ship. Rather than a truckload of "squbits" to
be shipped from New Jersey to Kansas City, only 4 pallets are needed to
be delivered. If the LTL sales personnel are out pounding the cement,
they will pickup on this new account. The new "squbit"
account(s) will balance out the loss of the manufacturing shipment. |
| LTL companies have a history of
surviving. Perhaps mergers occur and doors do close, but on the bubble
outlook, LTL companies have always been around. LTL companies have
survived world wars, depressions, recessions and terrorist attacks. If
companies are consumed by it's competitor, workers move to the new
company. |
| The benefit for the Teamster employee,
is the contract requirement of being re-employed at the company that
picked up the business at his previous employer. Companies that employ
Teamsters are required to employ laid off Teamsters before hiring new
personnel off of the street. A benefit for the company seeking an
experienced work force. |
| So rest assured, in the famous words
of Donald Trump, "cash is king and the sky is not falling". |
| Report Source(s): |
| http://www.bls.gov/news.release/empsit.nr0.htm |
|
