• Truckers Can’t Work From Home
Posted by Tom Harnish on May 24th, 2008
Truckers can’t work from home, and many are discovering the can’t work at all. Recently we wrote about how bankruptcies were mushrooming, and a few weeks ago we wrote about how the mortgage mess will clobber credit buyers before long as government regulators crack down. Truckers are suffering from it too.
These days it costs over $1,000 to fill an 18-wheeler, and trucking companies are failing at what some call “catastrophic levels.” Industry analysts estimate that 42,000 trucks, or 2.1 percent of the nation’s capacity, were idled in the first quarter—with nearly 1,000 companies going bankrupt.
The cost of diesel fuel has caused a cash-flow problem for truckers, forcing them to look for loans for basic operating expenses including the cost of license tags, insurance, maintenance, and, of course, fuel. But the credit-crunch brought on by the mortgage crisis has bankers cutting their losses and repossessing rigs.
Here’s the scary part—thanks to the falling U.S. dollar, Russia and eastern Europe are buying those trucks, and thus eliminating the rigs from the U.S. marketplace for good. That may not seem like a big deal in our slow economy, when there still are too many trucks chasing too few loads. But when U.S. demand picks up, though, there will be fewer trucks—and higher shipping prices. And when the price of transportation goes up, the price of goods goes up
Things are gonna get worse before they get better.