Service Centers
ASD Members Concerned About Truck Shipping
Written by Sandy Williams
April 27, 2014
SMU was pleased to attend the Association of Steel Distributors (ASD) Regional Meeting in Pittsburgh at the Esmark Center on April 27. Esmark Steel CEO Jim Bouchard welcomed ASD members to its new “American steel built” global headquarters on the Ohio River. ASD members were treated to a cocktail hour followed by a presentation by David Brooks, Senior Vice President, Publisher and Editor in Chief of American Metal Market. Brooks reviewed recent steel industry news and provided commentary on issues facing the industry.
The question and answer portion of the meeting focused on steel transportation difficulties. Brian Robbins, ASD president and CEO of Midwest Materials Inc., opened the conversation with the comment, “The transportation issue is deadly for a lot of us, not only on the Lakes but on the road.”
Comments from the membership included “struggling with items waiting for pick up” and “prices are higher, squeezing margins.”
One representative of the trucking industry said, “We’re still coming from behind but I think eventually it will catch back up.”
Another truck industry representative had the following comments: “I will say, though, that structurally there are a couple of changes out there. One, we are in an increasingly tight regulatory environment for drivers. . . It’s a very tough job. We find that when we are looking to recruit drivers, the pool of people we want to do the work of driving trucks, is getting smaller and smaller. Within that, the proportion of those who meet the standards and have that good work history and are CSA compliant is smaller. The problem in our industry right now is not the shortage of trucks but a shortage of drivers.”
He continued, “There are a lot of driver candidates that we might have taken 3-4 years ago now but now we can’t afford to take that driver with that record. Now we have customers who are saying ‘Tell us what their CSA score is–justify their CSA score.’ So we and our competitors have to be more picky on who we hire and unfortunately that reduces capacity and pushes prices up.”
“You can’t pay a driver to be compliant,” he said. “Being safety compliant is about the attitude of wanting to be a professional driver.” We focus on training drivers to give them the tools to be a professional he said. “It is a very tough environment because that professional quality driver is hard to hold on to.” He went on to say that companies focus on being as attractive to good drivers as possible, recognizing that good performance and providing bonuses and competitive packages.
“It is a very tough lifestyle, and I have a lot of respect for those guys out there behind the wheel of a truck, because it is not an easy job.”
A broker commented on the difficulty of hiring trucks: “My customer base has remained the same but my load list went from 40 loads to 320. These go out to 500 truck companies and they can pick and choose whatever ones they want. So if we have a load coming out of Indiana, for example, paying $ 2.25 a mile, and the exact same load from another customer from the same place paying $2.75 a load, they are going to take the $2.75 load.”
The broker went on to say that until rates catch up some people won’t be able to find trucks. Larger companies are using their trucks to satisfy their larger customer demands and smaller companies are left out in the cold. Trucking companies are afraid to buy trucks because they are afraid of what is going to happen in six months. Companies that build the trailers are not seeing orders picking up as expected.
She added, “If you have one driver that messes up, he can throw that whole truck company into a negative CSA rating, and someone like me, and many of you, cannot use that truck company at all. That company goes through a very bad period–it takes six months to fix that rating. What are they supposed to do in that period?
The evening closed with a few more cocktails and an invitation to hit golf balls across the Ohio River from the rooftop driving range. Bouchard jokingly offered a “million dollar” prize to anyone who could get the ball across the river—lots of attempts but no winners.
Sandy Williams
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