Fleet Unemployment Rises
This story appears in the April 13 print edition of Transport Topics.
The overall U.S. employment picture remained bleak in March, but the Labor Department’s latest report offered a slightly more positive picture for trucking’s performance during the just-completed quarter.
The industry did shed 14,900 additional jobs in March, but Labor significantly revised what had been two record months of layoffs to start 2009.
The Bureau of Labor Statistics said April 3 that the layoff total for January actually was 17,500, not the previously reported 24,900. That total is still the largest one-month total, with the exception of April 1994, during the UPS-Teamsters union work stoppage.
The change in February was even more dramatic — revised to 12,900 cuts instead of 33,400 jobs.
The revisions mean trucking lost more than 45,000 jobs during the first quarter of 2009, compared with a loss of 5,800 for the January-through-March period a year earlier.
Overall, Labor said, employers slashed payrolls by 663,000 positions in March, and the U.S. unemployment rate jumped to 8.5%, the highest level in 25 years.
John Coughlin, an economist with BLS, told Transport Topics the trucking revisions were likely the result of additional data provided to the department.
“With big revisions, it’s usually that a smaller piece of the sample comes in, and as more of the sample comes in, it just becomes more of a complete picture,” he said. “It is just one of the trials of dealing with sample-based data.”
American Trucking Associations Chief Economist Bob Costello told TT that he had been “flabbergasted about how big those numbers were previously.”“I’m not surprised at the revision,” Costello said. “I was more surprised at the original numbers.”
Despite the moderate improvement in the trucking numbers, economists suggested many more jobs still might be lost.
“We expect labor market conditions to remain appalling for many months to come,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, wrote in a client note.
Donald Kohn, vice chairman of the Federal Reserve System, said in a speech in Wooster, Ohio, that the U.S. economy is “not out of the woods yet.”
Labor said in the March report that since the recession began in December 2007, the economy has shed 5.1 million jobs, including 3.3 million jobs since November.
In March, the losses were spread over a number of industries but notably manufacturing, which lost 161,000 jobs; construction, which lost 126,000; and the temporary services sector, which lost 72,000.
Combined, the three sectors accounted for about 54% of all job losses.
As for trucking specifically, ATA’s Costello said the revisions “probably don’t change my outlook too much.”
“We shouldn’t take this as a major improvement in the numbers. It’s still a reduction, and it’s still substantial, which means that the industry is still rightsizing,” he said.
A number of fleets, both large and small, have either announced layoffs or shut their doors in recent weeks, adding to the industry’s job woes.
On April 2, refrigerated carrier Frozen Food Express Industries Inc., said it cut 150 jobs since the start of the year, and it had “approximately 110 positions that have been eliminated within the last two weeks,” said Stoney “Mit” Stubbs Jr., the company’s president.
In a statement, Stubbs said the company was making the cuts because it was facing “pricing pressure as excess capacity continues within the transportation industry.”
In addition, the Dallas-based carrier, which ranks No. 57 on the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada, said it had suspended its 401(k) matching contributions and was “consolidating duplicative efforts within its operating units.”
Other companies announcing recent layoffs or closing their doors include:
• FedEx Corp., which said April 3 it was laying off 1,000 employees.
• Hartwig Transit Inc., a family-owned mail hauler based in Oshkosh, Wis., shut down April 3, leaving 26 people unemployed.
• J.N. Moser Enterprises Inc., a general freight carrier based in Montgomery, Ill., closed its doors, the Joliet (Ill.) Herald News reported April 5, leaving 113 people out of work.
• Auto Truck Transport laid off 150 employees from its Cleveland, N.C., headquarters on March 23. The company said cuts were in response to layoffs at three Freightliner plants in the Cleveland area.
Bloomberg News contributed to this report.
