Consider This

Expect roadwork to heat up this summer

This may be the busiest summer yet for road building and repair efforts. Georgia has already begun more than $378 million in roadwork, and “that number

likely will be in excess of $1 billion—and a great deal of that work throughout the state will be done this summer,” according to Vicki Gavalas of the Georgia DOT. For motorists driving through Georgia and the other states that have begun roadwork, that means traffic delays and detours. Transportation officials try to minimize the impact on motorists by restricting most lane closures to nights and weekends. “Inevitably, though,” Gavalas says, “that much work is going to result in some inconvenience.”

Inconvenience is not the only thing on road builders’ minds. Safety is an enormous concern. Nationally, more than 1,000 people are killed in work zone crashes each year, and another 40,000 are hurt. The Memorial Day Weekend, the traditional kick off to the summer driving season, was particularly deadly.

Maryland’s Gov. Robert L. Ehrlich Jr. urges motorists driving through a work zone to “slow down, pay attention and remember that 90 percent of all crashes are preventable.” Many states are increasing enforcement of speed limits in work zones to boost safety. “Imagine if your work desk was four feet from vehicles moving 65 mph or more,” says the chairman of a road builders’ association. “My employees face these conditions every day.”

Truckload carriers’ profits mostly up

The first quarter has been profitable for most truckload carriers, with many companies posting increases by as much as three times the previous year’s first quarter. For example, one company’s first quarter income jumped to $19.4 million, compared to $6.4 million for the previous year’s first quarter. Another carrier posted a 38 percent increase over last year’s first quarter.

However, some carriers reported downturns for the quarter. The CEO of one truckload carrier said, “Softer than expected freight demand impacted both the average miles per tractor and our ability to obtain the level of rate increases we originally expected.” Still, the “softer” freight demand appears to be the exception, rather than the rule for most, as many carriers reported substantial revenue gains, excluding fuel surcharges.

There’s some speculation that first-quarter losses could be due to an economic downturn in the carrier’s customer base or that customers are doing business with other carriers for more competitive rates.

“It could be they got too aggressive on pricing and lost some freight to other carriers,” says one trucking analyst, who went on to add that a pricing environment for truckload carriers hasn’t been this strong in years. “The only thing carriers have to watch out for is whether freight growth will remain strong through the remainder of 2005 and not to get too aggres-sive in expanding capacity,” he adds.

Source: Roemer Report