Cover Story
Watching the soup-to-nuts freight

By Sandi Soendker
managing editor


When a hurricane closes a port, or giant shippers such as automakers cut production, it dependably makes the front page. But how do you keep a finger on the pulse of that “other” freight – the computer stands, copy paper, tennis shoes, widgets made by companies whose bottom lines aren’t worthy of major news? An old trucking friend from New Jersey used to call this “soup-to-nuts freight.” Many manufacturers and retailers of these goods are taking it on the chin right now.

How are you supposed to hear about it before you haul a load for a rubber check? When companies like the famous catalog shipper Lillian Vernon stumble, it’s more than “darn, my grandma loves their stuff.” For truckers, it’s calculated load loss. And it’s not that these companies are rip-offs. It’s just that many are going broke and you are not a “secured” creditor.

The popular phrase “knowledge is power” rings true right now for many owner-operators striving to make ends meet. If you are not computer savvy, it’s time to get comfy with using the Internet and making Google, Yahoo or another big search engine your BFF (best friend forever).

It didn’t take me three minutes to find that Office Depot supply chain may close North American stores and sell some assets after it posted a worse-than-expected loss in the third quarter. Consumer electronics chain Circuit City is implementing plans for massive layoffs and closing 155 stores. Pep Boys closed 31 stores in 2008, but the good news is that the auto parts chain is still kicking.

Google up “businesses closing” and you find Shoe Pavilion is closing all 64 stores in California, Washington, Oregon and New Mexico. One more minute and I found that Goody’s Family Clothing and Hancock Fabrics were shaky, but they are emerging successfully from Chapter 11 bankruptcy.

Mervyn’s, the California department store chain, is the latest in a series of retailers to enter bankruptcy. The latest news is they’ll be holding GOB sales in the remaining 149 stores. That might not be big news to most, but if you are hauling retail goods to Mervyn’s, it is.

Have restaurant supplies been your bag? You need to be watching restaurant closings.

Missing those construction loads? If you’re a flatbedder and have made a living hauling construction supplies for the past years, you’re no doubt jonesing for the good old days. But you still need to watch your customers as if they were your crazy neighbors. Even biggies like Home Depot closed five stores in 2008. And if you hauled the stuff that furnished new homes and buildings, that’s not looking so hot either. Ethan Allen home furnishings closed 12 retail centers. Levitz filed this year for Chapter 11 reorganization but is now ordered by the court to go Chapter 7 liquidation.

Areas that see loads of goods trucked in and out every day are our country’s shopping centers. Bloomberg News reported the average vacancy rate at neighborhood and community malls rose to 8.2 percent in 2008, up from 7.3 percent in 2007 and the highest level since 1995. And at regional and super-regional malls, vacancies increased more than 6 percent. Bloomberg quoted one economist as saying retail space is being “abandoned” at the highest level in 28 years. It doesn’t take much of a Google search to find who is scaling back, who is closing and who is bouncing back.

As we head into the first quarter of 2009, you are on your own to assess the health of your shippers. Nobody is going to spoon-feed you the state of that freight. Use the Internet to watch your customers’ health and keep your truck moving freight that pays. LL