While 2008-09 may go down in the history books as the toughest period endured by for-hire fleets since the Great Depression, not every fleet running in this rough-and-tumble, highly competitive end of trucking was cold-cocked by the recession that rained blows down on even the best-run fleets month after month until the economy turned the corner.
And it would not be far-fetched at all to think a Michigan-based hauler heavily dependent on heavy automotive-related flatbed freight would have had especially tough sledding in '08-09, given how the auto industry's tailspin went hand-in-hand with the economic downturn that very nearly became an economic collapse.
James Burg Trucking Co. (JBTC) runs 75 tractors and 90 flatbeds. Being that it is a true “Michigan carrier,” about half the trailers are fitted with eight axles enabling gross vehicle weights up to 164,000 lbs. The Michigan-rated rigs carry heavy loads of steel or other metals for automobile manufacturing as well as other area industries. It also runs a far-ranging regional freight operation that has been making as much use as it can of JBTC's heavy-haul equipment.
About 75% of JBTC's revenues are drawn from the heavy-hauling of automotive-related freight, another 20% from hauls for other types of manufacturers, and the remainder from moving construction materials.
JBTC weathered the economic storm successfully — not without cutting what costs it could. But more importantly, without cutting back on its ongoing efforts to boost safety performance, increase fuel economy, and reduce the weight of its trailers to gain payload, according to president & CEO Jim Burg.
Asked how JBTC came up with a plan of action before many fleets knew what was hitting them going into 2009, Burg says very directly that it helped enormously that “we saw back in 2005 that the Michigan economy was softening; even then auto sales were starting to fall off. Our first response to that was to begin expanding our regional operation.
“Of course, in 2008 and 2009,” he continues, “we largely had to be reactive to the marketplace and so we changed our business model three times over a six-month period from December '08 to May '09. Each time we adjusted our plan, it was to keep our overhead aligned to our sales.”
Each adjustment meant more operating cuts had to be made, Burg relates, even down to ferreting out unused cell phones and cutting off their service. “The third plan was for ‘survival mode,’” he adds, “and that one had me cutting the lawn here.” Burg points out that he made sure employee pay and health insurance plans were not touched, nor were the aforementioned programs in place to increase safety and fuel mileage and cut trailer weight.
JBTC was able to start expanding its regional service quickly five years ago by making as much double-duty use as possible of its existing tractors and trailers. When hauling heavy metal loads, the flatbeds are typically enclosed with “slider” frames with soft sides that allow accessing the cargo easily from either side of the trailer or from above. These are simply removed to convert the trailer into an open flatbed for regional hauls.
Burg is now expanding the regional service — which runs in Michigan, Ohio, Indiana, Illinois, Missouri, Kentucky, Tennessee and western Pennsylvania as well as Ontario — by bringing in some rental units that are new 80,000-lb.-GCW rated tractors. He notes there are two reasons for this equipment expansion approach. “Putting rented tractors into service right now helps control our financial risk. There is still concern there may be a double-dip recession and [for us] the memory of 2008-09 is still very fresh,” says Burg. “The second reason is rentals are an easy way for us to take a look at what is new technologically with some of the OEMs, in particular Freightliner, International and Navistar, none of which are currently represented in either of our fleet operations.”
