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Apr 1, 2010 12:00 PM

Jeff McCaig leads association through a tough recession

When looking at the rolling stock, we need to differentiate between tractors and tank trailers. We've seen significant reduction in tank trailers, which typically are more technically sophisticated and expensive than a dry van. It may not be cost effective to bring some of the parked equipment back into service.

BT: How much of the tank truck industry is idle at this point?

McCaig: I don't know exactly, but I believe it is less than most people think. Two aspects to consider: rolling stock and available drivers. I think pressure has been taken off the manpower side. Manpower levels probably are at 75% of what they were before the recession.

BT: How much did tank truck freight decline during 2009?

McCaig: It is hard to say for sure but it is probably close to 25%. True revenue decline might have been masked by fuel surcharges at some carriers.

BT: Where do freight rates stand today for tank truck carriers?

McCaig: We certainly faced a lot of pressure on rates in 2009. I think some of our more sophisticated shippers are starting to understand that pricing — especially when it is at rock bottom — is not the issue. The real issue is capacity. The focus is coming off rates, and they are asking if we can service their demands.

BT: How would you characterize the economic outlook for 2010?

McCaig: I think the future looks positive. I tend to believe that our financial regulators will be careful to withdraw the extra money that was injected into the US economy as a stimulus, and they will do that at a measured pace. The US economy will get back on a growth track. I believe we will avoid a double-dip recession.

BT: What key issues are facing the tank truck industry today?

McCaig: Manpower tops the list. The driver shortages we experienced before the credit crunch will come back pretty quickly. To be successful in our business, we'll have to be able to manage in an environment where there is a shortage of manpower, specifically truck drivers.

Fuel probably is next on the list of major challenges. Cost and volatility are key factors. The greenhouse-gases and cap-and-trade factors will have a big impact on the price of fuel, which is our largest, or second-largest, cost.

Then there is safety. We haul large and heavy cargoes, some of which are dangerous or hazardous. We run long distances, often in congested areas on infrastructure that needs investment. We absolutely have to operate in a way that meets the highest standards of safety. Those that can't meet those standards will have serious problems going forward.

BT: How is the uncertainly over hours-of-service regulations affecting tank truck carriers?

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