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Trucking industry rolling on in spite of a few speed bumps

It may not be the best of times in the trucking industry, but trucking companies are not singing the blues. Challenges abound. However, the wheels keep turning, moving the goods and products that consumers touch each day.

Fuel costs and other expenses continue to put pressure on trucking companies’ bottom line, and the industry as a whole is working harder and harder to find and retain qualified drivers.

However, trucking companies generally reported good business thus far this year, but not as strong as in 2006. All contacted for this story are optimistic that business will grow stronger in the near future.

“If it was easy, everybody would be doing it,” said Rick Kale, co-founder, president and co-CEO of Total Transportation Inc. of Richland.

Sticker shock

If filling up the family car has become a costly venture, just imagine what it is doing to trucking companies. And, that extra cost cannot always be passed on. So, truckers are starting to feel the bite.

Kale said swallowing fuel costs is not the mouthful that it was in 2006. But the good news ends there.

“Rising fuel costs are not as strong of a factor as last year,” he said, “but other costs are rising, too. Equipment costs, insurance costs — all are rising — and it is causing pricing pressure. We are actually charging less to haul this year than we did in 2006.”

Jim Stewart with MCH Transportation Company in Jackson said higher fuel costs are not affecting his company as badly. Most of his company’s work is as dedicated carrier, meaning a contract is in hand that allows for mounting fuel costs to be passed on to the customer.

Finding help

Recruiting drivers is an issue facing the trucking industry nationwide. Trucking companies are not only offering increased pay to lure drivers, they are also strengthening their benefits packages and “sweetening the pot” with incentives such as sign-on bonuses.

Effective May 1, 2007, a new plan offered by KLLM Transport Services in Richland provides for increased starting pay rates as well as a plethora of extras. These include: tuition reimbursement for training school graduates; $1,000 referral bonus; quarterly productivity bonus; and, other benefits.

Interestingly, KLLM formulated the new plan after getting feedback from its drivers. Kirk Blakenship, director of recruiting at KLLM, said the new pay package is a way to show that the company values its drivers.

“We want our drivers to know that they are the life force of this company, and we truly appreciate what they do,” he said.

According to Stewart, at MCH, which also offers a sign-on bonus and a complete benefits package, the shortage of drivers is being fueled by requirements of the insurance industry. Stewart said insurers have upped the minimum age requirement for drivers to 23 years old.

“Young people who are not going to college and are looking for a career can’t wait until they’re 23 years old to start,” Stewart said. “By that time, they’ve found a career, and aren’t interested in driving. So, drivers are getting older and older.”

Total Transportation, which operates a fleet of approximately 600 trucks, is fortunate in that, currently, it has a full complement of drivers. Kale said Total is also offering sign-on bonuses, better benefits, etc. But he said his company is generally just trying to take better care of its workers.

“We’re making sure they get home on time, get home if there is a family emergency — that kind of thing,” Kale said.

Moving ahead

“No other mode of transportation moves Mississippi’s economy like trucking,” said David Roberts, president of the Mississippi Trucking Association (MTA). “More than 70% of all manufactured freight tonnage in the state is moved by trucks, averaging more than 128 million tons a year. On average, trucks in Mississippi move 1.27 million tons of inbound freight and 1.19 million tons of outbound freight each week.”

Roberts said in 2005, the trucking industry in Mississippi paid approximately $412 million in federal and state roadway taxes and fees, or 42% of all taxes and fees paid by all motorists. In 2005, a typical five-axle tractor-semi trailer combination paid $6,791 in state highway user fees and taxes. This ranked Mississippi 27th in the nation in terms of state fees and taxes.

The trucking industry in Mississippi provides more 75,000 jobs. Total trucking industry wages paid in Mississippi in 2005 exceeded $2.3 billion, with an average annual trucking industry salary of $31,399.

The MTA’s mission is to serve and represent the industry, and it did just that this past legislative session. The only major transportation legislation that passed this year relates to tolling of newly constructed roads or bridges. MTA successfully fought for the inclusion of two key safeguards in the law — any existing road or any segment of an existing road would not be part of a new toll road, and the reconstruction or repair of an existing road would not be tolled, and there must be an alternate un-tolled existing route available at and along where any newly constructed tolled road or bridge is built.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.


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