Trucking demand up, workers elusive

Tim Krohn, The Free Press, Mankato, Minn.
·6 min read

Apr. 26—After the pandemic put the brakes on many in the trucking industry, firms have seen a rebound that promises to be long lasting.

Dan Forsythe, owner of Minnesota Valley Transport in New Ulm, said last spring and summer brought a slowdown for trucking, but things turned around dramatically.

"In September the market turned around and it's been the strongest I've ever seen it since then. People are playing catch-up. It takes exponentially longer to catch up than to go down."

Ryan Viessman, operations director at Cliff Viessman Inc., which has a facility in upper North Mankato, said demand is up, but staffing remains a problem.

"Things have picked up for us recently. We're busy but we're short on help — short driver, mechanics, wash techs. That's common throughout the industry," Viessman said.

John Hausladen, president of the Minnesota Trucking Association, said various trucking firms were affected differently last spring and summer.

"The impacts were felt distinctly by what you haul. We saw immediate surges as consumers stocked up on supplies. Then we saw immediate downturns in driving and (truckers) weren't delivering fuel. If you were delivering to grocery stores you saw business go up, but if you were delivering to congregate living, or schools or resorts you were down."

But Hausladen said there was a broad rebound late in the year.

"Generally the fourth quarter was very strong."

The changes brought on by the pandemic boosted the national transportation industry.

The explosion in demand for e-commerce shopping has increased shipping demand. Amazon recently started a program to ensure ample shipping capacity, according to a recent FreightWaves article. Amazon launched an incubator to help people start trucking companies to haul freight for the company. The initiative will provide business training and loans to help entrepreneurs start trucking companies.

Along with more e-commerce demand, trucking firms also saw higher demand as home building has been strong and home improvement stores, grocers and some other sectors saw sales climb during the pandemic.

Optimistic outlook

Viessman said that besides a jump in demand, a winter that brought few big snowstorms has also made truckers' jobs easier.

The firm, which has 21 locations across the Midwest and about 500 drivers, focuses on hauling things from mills to food processing plants across the country. Viessman said the record cold and snow in Texas recently did have an impact on the industry.

"With cold down south, that slowed things, stopped rail, so we're still playing catch up from that."

Viessman runs tanker trucks and said that while business is up, some portions remain slower.

"We haul to wet mills and our business there is probably 50% of what it used to be. But it's going to open up. When California (lifts more restrictions) that will help a lot. We have a big rail customer out there.

"I think it's going to be wild for a while. We'll be busy."

Like the rest of the industry, Viessman is held back by staffing shortages.

"We're trying to grow but we can't gain employees. We're not losing people to other companies, we're losing people to retirement, medical issues, stuff like that," Viessman said. "We have an older workforce. You find your drivers in their 50s or 60s."

Small firms hit harder

Forsythe purchased Minnesota Valley Trucking in 2015 after working for New Ulm-based J&R Schugel for nine years. Minnesota Valley was started in 1984 and has 25 refrigerator trucks that haul in the lower 48. The firm does a lot of work hauling for New Ulm's AMPI, the largest cheese cooperative in the U.S.

"The second quarter last year was really bad. Rates were so low nobody was making money, at least no one my size. There were too many trucks and less business," Forsythe said.

"My speculation is there were a lot of warehouses full and no one was producing a lot because they weren't sure what was going to happen. Schools were closed, restaurants were closed. There's this huge domino downward effect."

Forsythe said the biggest carriers, with thousands of trucks, generally came through last year better than small firms. "They run on contracts and their prices are set. For small firms like us, we work on handshakes and are subject to highs and lows."

Forsythe has escaped the staffing problems seen elsewhere in the industry.

"Overall in the industry it's gotten worse because people are less likely to jump ship because things are uncertain.

"I think it's uncommon, but we have every truck with drivers."

He said they are seeing issues with parts shortages as manufacturers have had employees out due to COVID.

"It's an issue when we break down. If our supplier runs out of brakes we could be shut down. It hasn't happened yet, but that's on my mind."

Rising diesel prices have also added to shipping costs.

"Diesel, up until (February), was incredibly stable. But in the last month it's gone up. The national average is $2.97 this week. It was $2.30 or $2.40 last year."

Still he's bullish on the future.

"All the experts say this good freight economy should last into 2022."

Regulatory worries

Hausaden said two worries permeate the industry — fear of more regulation and an ongoing shortage of drivers.

He said there is concern the new administration in Washington will add workplace rules and other regulations. And the industry opposes plans by Gov. Tim Walz to adopt California's more stringent emissions standards.

While the standards wouldn't include large trucks, they would cover mid-size trucks that trucking firms use. And, Hausladen said, once mid-size trucks have tighter emission restrictions it will be easier to also include large trucks.

"Economic recovery will happen faster if government does not put barriers in our way. If more barriers or regulations are put in place that will make it tougher to serve our customers."

He said the driver shortage shows no signs of abating, noting the average driver is a male in his mid-50s. And he said some drivers left the industry during the pandemic.

"We had a shortage of truck drivers before the pandemic and that continues. We continue to work to retain and attract new drivers, but we have a shortage. The economic rebound is going to make that shortage even worse. So there's going to be stiff competition."

While the pandemic put pressure on firms, Hausladen said it produced one good outcome.

"Truck drivers were key heroes in serving our communities and businesses during the pandemic. We learned that trucking was vital to keeping everything stocked and moving, from food and personal supplies to critical medical supplies and equipment. And that's continuing now as the truckers are delivering vaccines.

"I know the truckers are grateful the public has a greater appreciation of what they do."