Noise and Signal in the Economy

Lately, there have been crazy swings in the stock market caused by technical glitches (perhaps), and possibly fears of default on sovereign debt by Greece... and fears of the spread of this "contagion" to the weaker economies in Europe: Portugal, Spain, Italy and Ireland. While I admit the prospect of a lapse back into recession by the European Economic Union is spooky, one shouldn't immediately reach for the panic button.

1. Flight to safety of US bond market will keep bond prices high and yields low... meaning, we can keep financing our own debt at reasonable interest. Consequently, long term interest rates on mortgages should stay lower even after the government pull-out of the mortgage market.
2. This will provide positive feedback to the (slowly) recovering US real estate and construction industries.
3. Stronger dollar means your money will go a further.
   
4. "It's the jobs, stupid!" (I'm paraphrasing Bill Clinton's campaign manager's mantra during his last re-election bid.) US jobs data continue to improve. Check it out.
5. Improving jobs numbers will reinforce economic recovery as consumers make a bigger come-back and demand increases. US auto sales were up 20% in April.
   
6. Increased demand will reinforce jobs.
7. Asian economies are doing well, which is good for US exports, because most exports are to Asia, not Europe. According to the Wall Street Journal, GM's China sales rose 41% in April.
   

Sure, gold is up around $1,200 an ounce. Banks are still shoring up their balance sheets and capital reserves and being stingy with loans to certain sectors (ahem! truck loans!) This too shall pass. The fundamentals, if not strong, are at least improving. I'm cautiously optimistic that the meaningful data are in jobs and housing and retail sales data, not in stock market gyrations.

What are the effects of the economy on car hauling?

Ford economist Emily Kolinski Morris said the recent growth in U.S. gross domestic product—it rose 3.2% in the first quarter—is supporting a recovery in car sales. Ford is forecasting that 2010 sales industrywide will rise to 11.5 million to 12.5 million vehicles, up considerably from last year's 10.4 million. "I would be very surprised to see the sales pace tail off," she said in a separate conference call. -- Wall Street Journal: May 4, 2010

The curse of the “Zombie Truckers”

Zombie Truckers are still afflicting motor carriers both large and small

Mar 5, 2010 1:56 PM

Though a term more appropriate for a George Romero film than the freight market, “Zombie Truckers” are still afflicting motor carriers both large and small by keeping capacity in play that technically shouldn’t be there. The term – coined by Larry Gross, president of Gross Transportation Consulting and senior consultant with FTR Consulting Group – refers to truck operators who are not making their monthly equipment payments and thus should be bankrupt or shut down, yet remain in operation because the banks do not want to repossess their equipment as its value remains minimal.

This was a really interesting article I was tipped off by a friend who has 40 years in the auto transport business. One thing he says he's seen in all the years of analyzing the numbers is that a truck has to earn a certain amount per day on average, or you'll be better off parking it.

2009: A retrospective in miniature.

OK, we all know 2009 was tough sledding... but here is something interesting... despite the economic morass we were in last year, the little port of Tacoma, WA managed to pull in quite a few cars. Auto units: 117,357. That's $3.01 billion worth of vehicles, to be specific. (Source)

Port employees earned wages working at the port. Businesses and drivers earned money unloading, loading and transporting those cars. Some sales people down the road somewhere made some money selling those cars. Other people earned money fueling them up, washing them, providing service, etc.

What's the moral of the story?

I think it is good to keep things in perspective. Business was way off last year in a lot of different industries, but there was still business, even during the financial gridlock that was late '08 early '09. The governments and the businesses of this world cobbled together an exit from the financial and economic quagmire. We are still walking that path. It's not over yet. In a world as interdependent and complex as ours is now, could it EVER be over, really? But we have no choice but to keep moving forward, just like our grandparents had to do in the Great Depression and during World War Two. They survived by working hard and thinking creatively. We will do the same. Because we must. Comparing the two eras, I think you'll agree that what we went through was nothing like what they experienced. The governments of the world may have not come up with the best solutions for the economic crises, but they avoided a catastrophic breakdown of the financial system and a total locking up of liquidity.

Last year a little port in Tacoma, Washington moved 117,357 cars. And things are already picking up. I'd say we're on the mend. For now.

Convert your chain truck to a strap truck

We got some pics from one of our friends down in Jacksonville, Florida... T&C Welding is now offering a pretty snazzy solution for guys who want to convert their chain trucks over to strap. Here is a a few pics of their quick release strap box:




They also can modify your hauler so you can lower the top deck almost all the way down... allowing you to strap the cars down with your feet flat on the ground. If you're tiring of lugging around a bunch of hand ratchets, this could be a good investment for you. Junior has been building these systems for the past couple years for a local Jacksonville hauler, so he's had time to get the kinks out of the system. If you're interested in saving some weight (and saving your back), you should look into this system. It's a lot more affordable then selling your chain truck and buying a strap unit. Cost is about $1500 per deck, i.e., per auto. Lowering kit runs about $5,500 to $6,000 to do.
For more information on this system, give T & C Welding a call at (904) 778-7711

Auto Transport Business Software

Found an interesting company that has developed software customized for the auto transport business. Fellow to talk to is Aaron: (561) 244-2577

Should you buy parts for your car hauler sooner rather than later?

Inflation is right around the corner... literally. Southeast Asian economies are seeing higher cost inputs for metals and energy. China's annualized GDP grew at almost 12% in the first quarter this year... and their industrial production grew over 18%! In America, anecdotal evidence on the producer side suggests that prices are going to go up in the near to mid-term. And let's not forget fuel-- it's been creeping up all year, and Memorial Day is in six weeks.

I know two major steel chain manufacturing companies that have absorbed 12% increases in steel rod, the main component in welded chain.

A friend of mine who buys steel says his per foot cost on what he buys has gone up twice in the last four months.

Friends overseas say prices are starting to jump.

So I know I'm kind of biased, but I'm thinking that if you have some deferred maintenance on your car carrier... old aluminum cylinders that are puking oil... rusty, worn out cluster chains... bent and cracked ramps... frayed auto tie-down straps.... that sort of thing... you probably should buy sooner rather than later.... before diesel jumps up to $6 a gallon!

How to make money hauling cars?

Well I sure can't tell you the best way to make money hauling cars, but there is a pretty interesting calculator on this website that can aggregate some of the costs and put that up against the money you make hauling hotshot loads... I think this should be pretty adaptable to the carhauling business. So for those of you thinking of jumping into car hauling with thoughts of getting rich quick, play with his calculator a little bit before you buy a truck!

Hotshot Profit Calculator

This is why you should use 4 straps or chains per car.

Car hauler dumps fuel and cars, closes I-70 for 9 hours | zanesvilletimesrecorder.com | Zanesville Times Recorder
NEW CONCORD -- A nearly nine-hour closure of Interstate 70's westbound lanes on Tuesday was caused by a the rollover of a car hauler that dumped fuel and cars.

The accident happened around 8 a.m. and closed lanes until just before 5 p.m.

Lt. Mike Forshey, of the Ohio Highway Patrol Zanesville post, said Ronald H. Young Jr., 41, of East Greenville, Pa., was traveling west when he looked down at his GPS unit, and the hauler carrying nine vehicles slid into the guardrail, carrying the cab of the car hauler with it.

Three cars were ejected and rolled into the field, Forshey said, while the cab containing Young rolled over and landed on its roof.

The driver also was not wearing his seat belt... so he did have to go to the hospital for injuries. Moral of the story-- strap yourself AND your cars. You just never know.

Toyota Bends the Curve Upward; US Jobs Report favorable

Toyota Discounts Spur March U.S. Sales; Nissan Up 43% (Update3) - Bloomberg.com

April 2 (Bloomberg) -- Toyota Motor Corp.’s incentive push after record recalls helped the automaker post a March U.S. sales increase following two months of declines, while Nissan Motor Co. led gains among the largest Asia-based brands.

The Bureau of Labor Statistics reported Thursday that the economy added 162,000 non-farm jobs in March... and no, they weren't all Census Takers!

See full article from DailyFinance: http://srph.it/ajQyc6

Nummi Closure: Robots heading back to Georgia

Pension watchdog says Nummi plan underfunded

The federal agency that protects pensions says New United Motor Manufacturing Inc. is liable for $292 million in benefit payments but has just $161 million in assets, and it wants Toyota Corp. to help make up the difference.

Nummi was founded in 1984 as a partnership between Toyota Corp. and General Motors, but last summer GM quit the partnership and turned its interest in the Fremont plant over to Motors Liquidation Co., the bankrupt remnant of the old GM.

*I was talking to a customer in Kentucky the other day, and he said they were already loading up the robots from the Toyota plant and shipping them back to Georgia.

Jack Cooper Transport and Reality TV

Jack Cooper Transport explores reality TV possibilities - KansasCity.com
Jack Cooper Transport Co. teetered on the edge of bankruptcy last year and continues to fight for a turnaround of its fortunes.

Is that a story made for reality TV?

Mike Riggs hopes so. Riggs, chairman and majority owner of Cooper Transport, said the company has become a client of a Beverly Hills talent agency that will shop the idea of a reality TV show revolving around the car-haul company.

“I had never heard of such a thing, but there apparently is a niche of reality TV shows dealing with the workplace,” Riggs said.

Car hauling equipment in the UK

Came across an interesting website of a UK car hauling trailer manufacturer. Check out the car tie-downs they use over there. Looks a lot like the rollback straps we use over here in the US.

Need help with cold case

1992 PETERBILT WITH 1992 BOYDSTUN TRAILER WAS STOLEN FROM PACIFIC COAST TRUCK & TRAILER LLC. AT 8235 NE MLK BLVD ON 10/31/08 BETWEEN 11:55 PM & 12:10 AM, iF YOU HAVE ANY INFORMATION PLEASE CONTACT PORTLAND POLICE DETECTIVE JEFF BENDER 503-823-4104, ALSO THE DISTRICT ATTORNEY'S OFFICE 503-823-4047 CASE # 08-108942. RECOVERED FOUND IN TOLEDO WASHINGTON !
Thank You
Gary Clark
gary@pcttr.com
503-735-3707

Clunkers crush auto auction business in Danville

By Karen Blackledge
The Daily Item

DANVILLE — Wednesday marked the end of the oldest auto auction business in Pennsylvania, as the Danville Auto Auction closed, a casualty of a brutal used-car market decimated by the federal government’s Cash for Clunkers program.
Auction owner Robert “Bob” Welcomer said the auction’s business name has been acquired by a competitor, Central Pennsylvania Auto Auction in Lock Haven, but the Danville business will be shuttered under the terms of the transaction. Four full-time workers and as many as 35 part-time workers will lose their jobs.

Welcomer said there simply was not enough business for the two competing auctions to survive.

At the peak of its business, the Danville auction sold 300 vehicles during the once-a-week sale. On Wednesday, only about half that many vehicles went on the block.

The auctions have been hurt by a double-whammy. The economy has driven many used-car lots out of business, which eliminated many of their customers, and Cash for Clunkers took many of the vehicles that might have been sold in auctions off the market.

This is another example of how government intervention can distort the economy... picking winners and losers. Presumably to offset the lost jobs at this auction, there might be jobs retained at machine shops and other service providers to the new car industry... jobs that would have been lost if there hadn't been a massive government intervention. This is kind of emblematic of the law of unintended consequences.

Full Story: The Daily Item, Sunbury, PA - Clunkers crush auto auction business in Danville