Trucking Center
Without trucks, America would cease to operate, and the experience of trucking companies often serve as a bellwether of market trends.
Almost all the consumer goods consumed in the United States is put on a truck at some point before they reach the consumer, according to American Trucking Associations, a national trade association for the trucking industry.
In 2019, the trucking industry hauled 72.5 percent of all freight transported in the United States and in 2020, that figure held. But this lifeblood of the economy is currently under strain because of an increase in truck parts and fuel costs that are then passed along to the consumer, according to the trucking association and trucking companies in Butler.
“Cost of business has gone through the roof,” said Mark McClymonds, owner of McClymonds Supply and Transit Co, a trucking company operating out of the Portersville area. “Diesel has doubled since last year. We burn 450,000 gallons a month -- for trucks and equipment.We’re passing costs on to our clients. It's too exorbitant to absorb. You either pass it on, or you're out of business.”
McClymonds said that his business is still busy, but a shortage of employees keeps them from being able to fulfill all the demand their company gets. The company is known for their dump trucks, and the fleet includes triaxle (straight truck) dump, tractor-trailer dump, pneumatic bulk tank, roll-off triaxles and trailers, and heavy haul.
The company is deeply enmeshed in the area’s companies as they supply dry bulk materials to commercial, residential, and highway construction companies, landscapers, industrial manufacturers and mills, and the oil and gas industry, among others.
McClymonds said the company has 500 trucks in total, and they have nearly 600 employees, with openings for 40 positions.
“Every person counts,” McClymonds said.
Like many other companies around the country, employee retention and recruitment has become an increasing challenge.
“We've had a lot of people retire in the last two years, when COVID came in. And those have been hard to replace,” he said. “Workforce is absolutely older. A lot of folks have been here for 30 years. We don't see 20, 30 year olds filling applications; we get guys in their 40s and 50s. So they're here for a lesser period of time, since they're closer to retirement.”
McClymonds said he believes there might be an economic recession on the horizon.
“I'm concerned about a recession, that's for sure,” he said. “With these high prices, I don't know how, but a recession is probably going to happen in the fourth quarter. I hope I'm wrong. The high price of doing business is concerning. And where we're going is concerning.”
He noted that aside from the doubling of diesel prices, the availability of parts needed to run trucks is limited.
“It’s been terrible. There’s national backorders on everything. We’ve been waiting on several things for sometimes three or four months,” he said.
Todd Bachman, owner of Bachman Trucking in Sarver, said that these issues present a “daily struggle.”
He continued, “With the price of fuel and everything it's a little bit out of hand. Everything else is going up, too, that's oil related. Tires, oil, and then parts suppliers don't have anything. Engine oil additives are going to become a problem here soon, and that's going to create a shortage on oil.”
Like McClymonds, Bachman said he’s forced to pass the increased costs onto his clients.
“We're trying to stay ahead of it, but the fuel costs are terrible, and we have to pass that along to our customers, which end up hitting us in the end because trucks are used to move everything,” he said, noting that passing on price increases is a temporary solution as those increases will eventually come back around to them.
“We're all going to get hit with these price increases,” he said.
Bachman also noted some trends he is noticing about the economy.
“Work is plentiful, but it's starting to slow down,” he said. “Customers that we haul for aren't as busy. Demand tapers as the economy worsens, and inflation is further putting a damper on things.”
Inflation refers to an overall rise in the costs of services and goods over time. In the United States, the annual inflation rate averaged 3.27% between 1914 and 2022, according to trading economics.
And as inflation increases, an overall rise in prices over time will reduce the purchasing power of consumers. That’s because a fixed amount of money will lead to less and less consumption. Or put simply, less bang for your buck.
Bachman also deals with labor shortages.
“It's a constant battle,” he said. “Really no one has done anything to attract people to the trucking industry. It's not a glamorous job to spend every night away from home. It's tough. I have tried to do the best I can to keep good money in their pockets and good benefits and equipment. I treat them as human beings not as a number.”
Tom Wylie, president of the trucking and transportation business MHF in Zelienople, said that he’s noticed “a marked slow down of business in the last quarter.”
MHF transports general commodities, or as Wylie puts it, “We do a little bit of everything.”
He continued, “In the first quarter (of 2022) we had a contraction in the economy, and I'm pretty sure there's going to be another contraction. I'm basing that off volume and rates.”
Wylie worries that the cost of doing business increasing and the decline in work will create conditions for a downturn in the economy.
“And at the same time you're losing the revenue because freight volume is coming down,” he said.
The American Trucking Association also warns of a possible recession because of increased fuel costs. With no relief in sight to bring the cost of fuel down, those costs will continue to increase, pushing the country closer to a possible recession.
This article originally appeared in Butler County Business Matters.
