BIRMINGHAM. While the industry struggled through the recession, “zombie” truckers became a detriment to the industry and its recovery. The term was coined by Larry Gross, president of Gross Transportation Consulting and senior consultant with FTR Consulting Group. It 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 when its value is minimal.
But the fate of the zombies is beginning to change. John Kaburick, chairman of the Truckload Carriers Assn. (TCA), and president & CEO of Earl Henderson Trucking, delivered that message and many more during his keynote address to attendees of the 25th Annual McLeod Software Users’ Conference here yesterday.
“Banks have now started letting companies go broke,” Kaburick said. “[Zombie truckers] went into the markets and cut rates and that hurt well-managed companies.”
According to Kaburick, 7,600 carriers with six-plus trucks went bankrupt in the first quarter of 2010-- and 250,000 trucks have left the industry in the first two quarters of this year.
“That doesn’t include the number of fleets that have downsized hundreds of trucks, and some of them in the thousands,” Kaburick added. But he said those companies that have survived are now positioned to take advantage of tight capacity and competitive rates.
“We’ve got to watch our business from inside out and that takes the best software [available] today,” Kaburick remarked
And that was the key theme among presenting companies at the event. Many of the products related to the new federal safety-scoring system CSA 2010 and its rollout.
“We want our customers to manage these changes,” said Tom McLeod, president of McLeod Software in his opening remarks. “The general consensus is that once the regulations are in full effect, they will improve (safety) … but I think in the short term, there’s going to be a period of heartburn until you learn to manage the information. It makes it all the more important that the information is integrated.”
TCA, like the American Trucking Assns. (ATA) and others, have had issues with CSA 2010 and its rollout, but changes made by FMCSA in August have helped in some cases.
“It’s a bad situation if you’ve got four brand new straps and a load of pipe takes four straps and you put four straps on, that’s OK,” Kaburick said. “But if the driver sees he has an old strap and decides to put it on for added safety, that’s a violation.”
In 1979, Kaburick said, the industry had a fatality rate of 5.5 per 100 million miles driven. That rate dropped to 1.64 in 2008 and 2009 might be lower with 100 fewer fatalities than in 2008. The final 2009 rate has not been released. That should improve further once CSA 2010 is fully implemented.
“I do believe when we come out of the other side of it, it will be a good thing,” Kaburick said. “The one thing it is doing is [increasing] the ability to hold the driver accountable.”
Kaburick added that he believes fleets may not have to make tough decisions on drivers as insurance providers will be making many of those decisions-- telling fleets they won’t insure particular drivers who are accumulating poor CSA scores.