Wheeled and wired – Internet service providers, information-sharing businesses and trucking companies are major economic players in Montana

When you drink your coffee, you don’t tend to think of the cup.

By ROB CHANEY of the Missoulian Picture the Progress 2003
A special report on Montana’s Economy

When we look at the business around Missoula, we don’t tend to think of the network of trucks and wires that link it altogether. So it may come as a surprise to learn that six of Missoula’s 37 biggest employers are freight-hauling companies. U.S. Census figures show that one of every 10 workers in Western Montana serve in the production, transportation and material moving occupations.

In addition, there are six Internet service providers and nine cell phone companies in Missoula alone. That doesn’t count major employers such as Education Logistics Inc. and Invizeon that are re-imagining the ways people share information.

Both industries face major challenges. A look at the want ads shows the constant cry for more over-the-road drivers to move the nation’s freight. Communications companies try to provide the latest high-tech services without sinking investments in dead-end technology.

Technology is shaking the traditions of old-line institutions like railroads, where engineers are moving trains by remote control. Truckers now plot their fuel stops by GPS-assisted computer models. And while computers may depend on delicate bits of silicon microchips, a major development for the Missoula area has been building earthquake-proof bunkers to ensure national computer services can endure disasters.

Montana doesn’t produce many of the commodities that the world wants to move. But because it takes up a significant chunk of the planet, a lot of the world’s stuff has to move over its roads, rails and wires. And because it’s an attractive chunk, many of those doing the moving want to call it home after letting go of the wheel or the keyboard. The companies that have grown up in Montana depend on leaders visionary enough to make their industries work here, instead of somewhere else.

Trucking companies were among the first to feel the economic pinch, but they say signs of a rebound are finally starting to show

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On the road again

By MICK HOLIEN of the Missoulian

The trucking industry, which was substantially impacted by a slowdown in the economy in 2000, is rebounding from a further decrease in business that occurred after the terrorist attacks of Sept. 11.

“Trucking is still stressed,” said Ray Kuntz, chief executive officer of Watkins and Shepard Trucking. “I think everybody out there will tell you that shipping has picked up but it’s still spotty. It’s stronger than a year ago but it’s not gangbusters by any means.”

Long a major player in the western Montana economy, five Missoula trucking companies are included on a list of the area’s largest employers as identified in a community profile recently published by the Missoula Area Economic Development Corp.

“It’s been hard on owner-operators, hard on us,” added Jim Palmer of Jim Palmer Trucking. “When the economy’s down, it’s always rough on you.”

Barry “Spook” Stang, executive vice-president of the Montana Motor Carriers Association in Helena, agrees that things are looking up, but points out among other increased costs, like fuel and insurance, new federal regulations regarding security are costly and must be passed along.

“I think it’s in a recovery stage,” he said. “Hopefully shippers will pay the cost.”

While depressed rates are partly responsible for the number of trucking companies who have been forced into bankruptcy in recent years, increasing fuel and rising costs for health and liability insurance and workers compensation also are prime factors.

The recent surge in bankruptcies is part of the reason, said Kuntz, that trucking companies are doing better.

“It’s a little hard to read,” he said. “Part of it is the economy is improving. … We have been feeling a stronger economy all year long. In our particular case we’re doing significantly better this year than what we were doing a year ago.

“You don’t want to take that too far,” said Kuntz. “We’ll get a strong week, then it will be followed up by soft spots.”

“We’re feeling pretty good about things right now,” added Palmer. “We’ve got more freight than we can handle but again we need to get some raises to make it work. The rates are depressed. I’m sure they are going to go up some.”

Trucking feels the pinch of a recessionary time before it’s recognized elsewhere and the industry also sees the first benefits of recovery.

“When it starts picking up the first thing that happens is that people start shipping and we feel that insurgence of inventory,” said Kuntz. “We get hit harder sooner when it slows down and we feel it coming back ahead of everyone else.”

“I think if trucking is in a downturn, the economy’s in a downturn,” said Stang.

The shortage of equipment (because of some 10,000 bankruptcies in the last three years), is troubling for the trucking industry and eventually will affect consumers, but there’s also a shortage of drivers.

“That’s always been a problem,” said Palmer, who hopes to grow his sizable operation by 50 units this year.

“Across the country there’s still a shortage of drivers and as soon as it picks up, that shortage will intensify,” said Kuntz. “The amount of drivers being trained is not quite what it was a year ago.”

Federal money previously in place for driver training companies also has decreased, he said.

Watkins and Shepard is the only private company in Montana operating a driver’s school, said Kuntz, and it’s quite a bargain for job seekers.

A $500 down payment is required but the $1,700 balance can be paid monthly after a driver is accepted by the company and takes to the road.

While there are stringent certification and qualification requirements, a driver can be on the company’s payroll five weeks after starting the school.

“It’s a fairly rapid rate,” said Doug Stewart, Watkins and Shepard driving recruiting manager. “They’re assigned a truck and they’re out there producing.”

And the need will be greater, he said, in the immediate future.

“I see the demand growing not decreasing, said Stewart. “I think the need is there.”

“We’re constantly trying to expand the amount of people we can handle,” said Kuntz, adding that 10 to 12 people usually go through the class every session. “It’s a struggle to keep the school full.”

Equipment and driver shortages eventually will trickle down to consumers in delays in delays in shipments of goods and higher costs.

“We’ve seen parts of the country where there’s been a little bit of shortage of equipment all summer long, not enough to be a crisis but enough to be a little frustrating for shippers,” said Kuntz. “If the economy comes rolling back fairly quickly than there’s going to be shortages of equipment out there and there may be delays in some areas getting freight in because you can’t take all these trucks out of the market and expect the same capacity when things get rolling again.”

One of every 13 workers in Montana is employed in the trucking industry with an average wage of $30,000, although most drivers are making more than that.

“They’re good-paying jobs,” said Stang. “I think they play a big part in the (state’s) economy.”

“They’re not low paying jobs,”added Palmer, who has little driver turnover. “People are getting way above the state average. We’re not on the low end of the totem pole.”

He said said public companies will continue to make it tough on private ownership.

“They work with like Monopoly money,” said Palmer. “It’s hard to compete with those types of people because they use a different dollar than we do.”

Most agree, however, the future for the industry looks brighter.

“I see a stronger economy for trucking in the next three to five years,” said Kuntz. “As the economy comes back I feel that the trucking economy will be good. As an industry, we’re a little behind. Driver’s pay is lagging a little bit and it really needs to be brought up. As it comes back and rates increase a little bit, driver’s pay will increase and that will allow that job opportunity to be a little bit more attractive than it is today.

http://missoulian.com/bonus/progress03/progress19.html

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