Tweet

Apr 1, 2010 12:00 PM

Jeff McCaig leads association through a tough recession

Even in the wake of this latest recession, McCaig remains confident that the decision to focus on trucking — particularly the tank truck sector — was the right one. “There is no question that this is a tough business today, but we have been able to grow and we are still one of the largest bulk trucking companies in North America,” he says. “Certainly this is a very competitive business. However, I don't think we could have been North American in scope with some of the other businesses we owned previously. We would have seen even more severe economic cycles with some of those businesses as compared to trucking.”

During a recent interview with Bulk Transporter, McCaig discussed the impact of the recession on tank trucking and the current state of the industry. He also reviewed the recession's impact on NTTC.

BT: How would you describe the state of the tank truck industry today?

McCaig: It's a very competitive business. We are always going to face a dynamic where we are a smaller and more fragmented industry than most of our customer industries. We're always going to be small in relation to our customers.

I believe we will see more tank truck industry consolidation, but it will be slow. In my view, there are not huge economies of scale that come from getting bigger in this industry compared to other sectors. Small carriers can be as competitive as larger operators. Some of the strongest competitors are the small fleets that can really focus on a single customer or single location.

Mid-size carriers sometimes face a squeeze because they start to experience some of the big-carrier costs without the economies of scale associated with purchasing, risk management, and employee benefits.

The demographics continue to work in favor of consolidation. For instance my family has run Trimac for three generations, and the third generation is reaching retirement age. I am the only family member of my generation to be actively involved in the business, and at this point there are no fourth-generation family members that have entered the business. Trimac has a professional management now, and it probably will continue to be managed that way going forward. We're not a family business in the traditional sense anymore.

BT: Is the recession over for the tank truck industry?

McCaig: That's hard to say. We've certainly noticed a pick-up in our volumes. At Trimac, we are above our budgeted revenue each week. Whether we are seeing a temporary replenishment of inventories or are seeing a sustainable return to growth remains to be seen in my view.

BT: What impact did the Obama Administration economic stimulus programs have on the tank truck industry?

Continue to next page.