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she said, because they can’t keep the transport management systems, all of
business in the family. Younger family which are making it harder for smaller
members aren’t as anxious to take on companies to survive and prosper. “higher costs
the burdens of running dad’s operation, “The avalanche of regulations that
Batts said. are coming down,” Batts said. “The guys aloNg with
“If this was an industry that was sit there and ask ‘I want to run a truck- a lackluster
printing cash the kids would want to ing company, but how do I comply with recoVery has
stay in,” Batts said. “But it’s not.” these ever-increasing regulations?’ They made m&a actiVity
To many younger owners or poten- just don’t know how they’re going to
tial owners, the effort of company absorb the cost of those regulations.” Very attractiVe
ownership doesn’t seem to offer enough Ahern agreed the regulations put for some.”
reward. a “tremendous drain on our industry”
“They see how hard dad works,” and added the uncertain economy to —bob costello, americaN
Batts said. “And even though it’s a cor- the mix as the country grapples with truckiNg associatioNs
poration the owner has to guarantee all the aftereffects of the Great Recession.
that equipment. There are some people “The guys in the industry are say-
in their 40s who have gotten into it and ing ‘Hey, it’s time,’” Ahern said. “If
just don’t think they can grow it fast there’s an opportunity out there most of continue, Batts predicted.
enough. They just don’t believe you can the industry wants to sell.” “Trucking can never get safe
buy one truck and grow it into a J.B. The driver shortage is also a prob- enough,” she said. “We can never get
Hunt 10 years later.” lem for many companies. An aging green enough. We will never solve the
Cost of new equipment is one of a driver fleet, mirroring the aging owner- driver shortage problem. It just wears
number of factors affecting the truck- ship corps, has many companies look- you down. The only way you can deal
ing and transportation industry, factors ing for ways to improve retention with with that increasing complexity is
that are simply harder on the smaller shorter hours and routes, getting driv- you’ve got to get better.”
companies, which is why there are so ers more time with their families, and “The strong are getting stronger
many willing to sell to larger carriers. other perks. and the weak are going by the wayside,”
“Today I’d say there are a number Not surprisingly, the larger compa- Ahern said.
of medium to small fleets that are dying nies may attempt to solve their short- But small doesn’t necessarily mean
on the vine with their equipment,” ages by acquiring other companies. weak. Weaker carriers tend to compete
Costello said. “They have been unable “Also, larger fleets (truckload) are on price and don’t have clear goals or
to replace that equipment because of looking at other fleets for their drivers,” ideas of what to offer to set themselves
higher purchase prices, which now puts Costello said. “We have seen this in the apart. But there are enough opportuni-
them at a competitive disadvantage. past when freight starts to grow and ties out there for small and medium
Running older trucks, they have higher drivers become scarce.” operators to continue to make a go of it,
maintenance costs keeping that equip- Then there is the additional fear of if they want to put in the effort.
ment up, and the newer trucks are more litigation. Smaller companies are offering
fuel efficient, helping fleets that can Trucking companies have been fat solutions tailored to certain geographic
afford them. targets for class action lawsuits, which, areas and industry-specific needs like
“In the past diesel prices drove Batts and Ahern said, is an underlying same-day delivery or energy distribu-
some of this activity, and failures; today fear for small and medium-sized owners tion, for example. Given the size of the
I’d say it is older equipment and some of already grappling with other financial nation and its regional needs — produce
these fleets coupled with a more regu- worries. in the west, energy in the Gulf — it is
lated environment.” Ahern pointed out that no mat- not likely every company owner will
Batts said the average price of a ter how safely a company operates, the have to get out just because the getting
new truck, estimated in some quarters reality is that sooner or later, someone looks good.
at $125,000, “has really thrown people somewhere will be involved in a fatality. Batts agreed with Costello that
for a loop.” Some older owners are dealing with while there is more turnover among
Along with the economies of pur- the underlying fear that just such an the smaller carriers they aren’t going
chasing scale, problems plaguing the accident and ensuing legal action will to completely go away and the trucking
smaller and medium-sized companies cripple and drain a company before they industry will always have more diversity.
include regulations governing emis- can sell and enjoy their retirement. “It’s never going to look like the
sions, safety, hours-of-service and fuel Most of the factors affecting the airline industry or the railroad,” she
efficiency and the evolution of modern spike in mergers and acquisitions will said.

aRkaNSaS tRuckiNg RepoRt | issue 2 2014 39