How the financial crisis affects car haulers

First of all, the scarcity of money-- the so-called "liquidity crisis" makes deals on major equipment harder to complete. You pay more for the capital you need to purchase new trucks. It becomes harder for you to sell your truck, because the person buying your truck has the same problem. There are fewer buyers that qualify as lending guidelines grow tighter. Some banks go into panic mode, and refuse to write certain loans, no matter how good your credit is. There is less competition among lenders for your business. That's never a good thing.

Consider the rates that GE Credit is offering today in their fleet credit program: 12% to qualified buyers. Three months ago, the rate was 8%. (As reported by Andrea West, owner and finance manager of West Coast Enterprises, the nation's newest Cottrell auto transport trailer dealership.)

Secondly, there is less freight to haul, because fewer people who want new cars qualify for credit. It becomes harder to "push that 4000 lbs of steel" across the sales desk at dealerships around the country. Less new car sales equals less used car sales. Less car sales means the auction freight slows down.

Thirdly, less POV freight as people cutback their spending, and as the housing crisis makes it harder to sell homes and move.

Disaster Economics 101

As with all things, the less there is of something, the more you will have to pay for it. The less money there is available to be loaned out (liquidity) the more you're going to have to compete for it. Also-- as more and more banks have to take crappy loans back onto their balance sheet, the less money they will have available to loan out, because of capitalization requirements.

And with banks uncertain about each others' willingness and ability to repay loans to each other, more and more banks here and abroad are having to rely on the central banks for overnight requirements.

The "seizing up" of the commercial paper market is happening in parallel with this, (in a huge oversimplification) pretty much because money market funds no longer want to buy the commercial bonds offered by businesses needing to raise large sums of money for short periods of time to meet their cash requirements.

Normally, banks perceive loans made to each other to be so "safe" that the spread between what the US Treasury pays and what a major bank pays for money is measured in tenths of a percentage point.
The current spread between the 3 month Treasury bill and the LIBOR (London Inter Bank Offering Rate) is almost four percentage points. This spread provides a pretty good index of liquidity within the economic system, and lower is definitely better.

This brings us to the final point, that most self-employed car haulers are already aware of...There is just less money "out there".

Ford, BMW & Renault forecast slow 2009

Bloomberg.com: Worldwide:
I guess you'd file this under "Expecting things to turn around? Don't hold your breath.
"Oct. 2 (Bloomberg) -- Bayerische Motoren Werke AG, Ford Motor Co. and France's Renault SA said a slump in car sales may be more prolonged than manufacturers have anticipated.

Auto markets won't recover until at least the middle of next year, BMW Chief Executive Officer Norbert Reithofer said today at the Paris Motor Show. The world's largest luxury-car maker may deepen production cuts if people continue to delay purchases. Ford CEO Alan Mulally said a recovery won't begin before 2010 and Renault boss Carlos Ghosn said the slowdown may last two years."

Cottrell trailers marketing genius

Cottrell has re-branded their strap trailers under the moniker "NextGen". This came on the heels of the stern letter they sent out that warned against modifying their chain trucks to use straps instead of chains. This letter basically said, "Convert your chain trailer to straps, and you might just void your warranty. blah, blah blah You should buy a strap truck, if that's what you really need. blah, blah blah"

This is sheer genius. Lawsuits against Cottrell are practically a cottage industry for certain law firms. The LAST thing they need is another lawsuit. It defies logic to imagine how a jury could conceivably blame Cottrell for a problem resulting from a modification of their trailer done by a third party. But of course, the legal system defies logic on a daily basis. Cottrell has turned a potential negative into a marketing opportunity.

So... if you're hauling Toyotas, you have the pleasure of deciding whether to (maybe) void your warranty on your not-so-old trailer... OR... sell your chain trailer into a down market, take a hit and buy a new strap unit from Cottrell. If you can get financing.

Of course, you could buy a strap unit from Boydstun, but at least as of today's date, that would have to be a strap unit that utilizes screw actuator units. Boydstun is supposed to be coming out with their own version of a cylinder-strap trailer any day now, so I'll post something on that when I hear more.

Automakers Lobby For Bailout : NPR

Automakers Lobby For Bailout : NPR: "Automakers Lobby For Bailout"

Hmm... perhaps EVERYONE should begin asking their congressional delegation for some money. Maybe we should just turn America into a giant day-care center where we get to just play with trucks and Play-dough and never have to face adult responsibilities ever again. That would be sweet.

Auto Transport Jobs

If you're looking for experienced auto transport drivers, Autohauler Shopper has just turned on the "JOBS" module on their website. To post ads for car hauling jobs, just login to your account and post an ad. The employment advertising costs $49.95 per month for unlimited text. This ought to make things a bit easier for recruiters! Any questions, please call 503-342-2085

Boydstun to close Jacksonville, FL shop

Just heard that Boydstun Metalworks is shutting down their Jacksonville repair facility. Owners of Boydstun equipment down there would be well-advised to visit Walter over at T&C Welding. (Also in Jacksonville)

He ran the maintenance shop for the Toyota hauler Southeastern Transport, and they've run Boydstun trailers for quite a while. He is quite familiar with the Boydstun product. However, if you've got any service issues with a Boydstun screw unit, you probably need to call Boydstun first.

National Association for Small Trucking Companies

Joe Pye, general manager of LMR Trucking told me today that they are seeing significant fuel cost savings as a result of their participation in the NASTC fuel program. Headquartered in Hendersonville, TN, NASTC provides lobbying efforts on behalf of small fleets, plus they have negotiated discounts on fuel, truck services, insurance and more.

Joe says annual dues to join are $350. He said that when they started using NASTC a little over a year ago, the amount their fleet of 14 trucks saved on fuel paid for that membership in one weekend!

LMR Trucking joined solely for the purpose of lowering their overall fuel costs, but Joe says there are plenty of other services available at a discounted rate through NASTC: drug screening, insurance, repair discounts, cell phone discountsetc.

Joe says that they tried the NASTC's driver hiring service, and it didn't really work for them, as most of the applicants had no prior auto transport experience. However, when he called to cancel the service, NASTC refunded his money without any hassle. Joe said that when they were first looking into the program, NASTC sent out a rep who dealt directly with their primary concerns about the fuel program-- and didn't try to sell them a bunch of stuff they weren't interested in.

For more information, you can call NASTC at 800-264-8580

Pounds of pot found in car hauler

Pounds of pot found in western, northern NM - Las Cruces Sun-News: "In Gallup, authorities at the port of entry became suspicious of the cargo on a car hauler being inspecting Tuesday morning. Inside one of the cars on the hauler was 129 pounds of marijuana in duffel bags.

Authorities arrested Peter Harris, 28, and Fabian Williams, 31, both of Florida."


129 lbs? That's some pretty serious quantity... and serious jail time, too. And if you inform on the dude you're hauling for-- possibly even worse consequences for you or your friends and family. That's what you'd call a lose-lose situation. Let those guys haul their own drugs. Seriously.

Another drugs & car hauler story

DPS dog sniffs out hidden drugs in truck being hauled on I-10 | www.azstarnet.com ®: "The Arizona Department of Public Safety discovered drugs inside a pickup truck being carried on a car hauler east of Tucson Tuesday morning.
At 10:46 a.m., on Interstate 10 east of Tucson between the turnoff to Arizona 83 and Benson, a Department of Public Safety officer stopped an eastbound car hauler, said Carmen Figueroa, spokeswoman for the Arizona Department of Public Safety.
A drug sniffing dog alerted the officer to the odor of drugs in a pickup truck, she said. They found drugs in a false bed or a pickup, she said."

Sounds like this driver had nothing to do with it. Folks, I'm telling you, the drug enforcement authorities are focusing their attention on car haulers. Keep your nose clean! (literally AND figuratively) You don't want to haul some loads. Drugs are bad, m'kay?

Car hauler busted for hauling $3M of coke

CRIME Blog | The Dallas Morning News: "The government presented evidence at trial that Watkins, and his co-defendant, Steven Alexander Aaron, 37, were arrested on April 22, 2008, after their eastbound vehicle, a tractor-trailer car hauler, was stopped by a West Central Texas Interlocal Crime Task Force Officer on Interstate 20, near mile marker 266, in Taylor County, Texas, because it didn't have secure chains or a license plate. Aaron was driving the vehicle; Watkins was the sole passenger. The car hauler was loaded with a maroon Chrysler minivan and a black Range Rover. After obtaining Aaron's consent, the officers searched the tractor-trailer and the two loaded vehicles, and discovered six bricks of cocaine in a black backpack in the rear hatch of the Range Rover. Testimony at trial showed that Watkins had hidden the backpack in the Range Rover. The street value of the cocaine in the backpack is approximately $3 million."

Car hauler: help wanted in Portland, Oregon

We need car haulers in the Portland area to help us demonstrate a bunch of new products. We're chomping at the bit to use some new video equipment we just purchased. If you've got a three car trailer or a stacker unit, we'd like to talk to you. Call 503-342-2085.

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You get what you pay for... bananas!

Scott Chandler, owner of Park Service Logistics told me a funny story today. He said a car hauler he knows got underbid by $500 on a load. A little bit later, the broker called back up and said that the truck that pulled up to haul his $60,000 car was loaded with crates of bananas, and they were just going to stick that fancy car on the rear of that trailer somehow.

Bananas.

I think it's stories like these that indicate we must be getting somewhere near the bottom of load price. But you still hear stories of cutthroat competition. And, unfortunately, it's usually an auto transport company cutting its own throat.

It reminds me of that old saying from the sixties-- "What if they had a war and nobody showed up?"

What if there was a load and nobody showed up?
What do you suppose would happen next?

Here's a really simple truth. A broker's quality of service is directly dependent on the quality of the carriers that are hauling his loads for him. Since most businesses grow by positive word of mouth and referrals, what do you think is going to happen to the fly-by-night operations that sit on a load for two weeks waiting for some carrier to agree to haul it for pennies? That right there is a strike against him... but more importantly, when that load does finally gets picked up, is that driver going to give the best service? Maybe... maybe not.

Brokers who squeeze the carriers this hard are basically violating the biblical principle "As you sow, so shall you reap." It's one thing to negotiate, but to press your advantage in a way that cripples the other party is unsustainable. It's trying to get something for nothing.

Contrast this behavior with the broker that negotiates a decent price with his customer, and offers the carrier a fair price for his service. If his driver is getting enough money to meet his needs, isn't he more likely to return phone calls, and make the extra effort that is going to improve that broker's reputation with that customer... and lead to more referrals and repeat business?

I think anything other than this type of sustainable business relationship is just... bananas.

MyFox Atlanta | Michigan Truck Driver Tapped to Speak at Democratic Convention

MyFox Atlanta | Michigan Truck Driver Tapped to Speak at Democratic Convention: It'll be interesting to hear what he has to say... will it in any way reflect the business realities faced by car haulers in the current climate, or will it lean more toward boiler-plate union language?