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Highway demandEconomy rebound prompts trucking to hire in midstate

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Trucking companies around the midstate have put out the signs. Two words usually say it all: "We're hiring."

Company executives and analysts are seeing some of the same trends on micro and macro levels in the trucking industry. Companies are hiring drivers, mechanics and others to support the larger demand for truck services spawned by a slow-growing economic rebound.

Although it seems like welcome news to the Central Pennsylvania economy because of its trucking and logistics ties, beyond that industry the growth could mean rising prices for shippers, such as manufacturing companies.

One out of every 11 workers, or more than 418,000 people, are employed by trucking, making it Pennsylvania's fourth largest employer industry, according to the Pennsylvania Motor Truck Association. Trucking also moves more than 1 million tons of freight in and out of the state each day. The midstate is a hub for this activity because of its intersecting highways and railroads, and its half-day proximity to more than 50 percent of the U.S. population.

Still, the business coming into trucking companies is starting to stabilize the industry, executives said.

"We're starting to see that turn, the money and financing coming back to the industry," said Todd Long, president of Daily Express Inc., a Cumberland County-based flatbed trucking company that hauls heavy industrial equipment for the energy and construction industries.

Daily Express, headquartered in Middlesex Township, has been hiring independent drivers with their own trucks since 2010 and continues to look for drivers now, mainly because of increased work hauling equipment for power plant upgrades, wind turbine construction and even some rig hauling for gas drilling in Marcellus Shale, Long said.

Daily express has 290 trucks and drivers under its command, he said. There's enough work to support the company growing to 350 trucks, but the ideal size would be to grow to about 325 trucks this year, he said. The company bought 10 trucks to loan to independent drivers who lost their trucks in the recession, he said. The arrangement is a lease-to-own deal, he said.

"We spent all of last year turning down jobs because we didn't have enough trucks," Long said.

Rapidly expanding intermodal services — where freight is shipped cross-country by train then put on trucks for the short haul — is a key factor in expanding trucking in the midstate and for more hiring, companies said.

That was the reason for Arkansas-based trucking firm J.B. Hunt Transport Services Inc. building a new facility at 2367 Sycamore St. in Swatara Township, Dauphin County, said Tom Markarian, the company's regional director of maintenance for the Northeast. Eighty-five percent of its business in the Harrisburg area is taking containers off Norfolk Southern trains at the Harrisburg and Rutherford rail yards to drive them to warehouses or stores, he said.

By building the new terminal, J.B. Hunt can park as many as 240 trucks, 50 trailers and hire about 30 people in its maintenance department. The facility will allow the company to fix trucks and trailers in the midstate instead of shipping them off to another location or having a third party fix them, Markarian said.

"We were contracting most of the work on our trucks to outside companies, so it was a good time for us to build the facility and bring that work back in-house," he said.

The facility will also allow J.B. Hunt to centralize its operations instead of running back and forth between multiple leased locations around the midstate, he said. The company's Harrisburg facility is scheduled to open before the end of the month.

Other larger national firms, such as Phoenix-based Knight Transportation Inc., are also hiring. Knight, which has a facility in Middlesex Township, Cumberland County, has a notice on its Harrisburg Pike sign that reads "Now hiring drivers." The company did not return requests for comment on this story.

If the hiring trend sounds like business is on the up-and-up, many companies keep the hiring signs up for long periods of time, even if they're hiring just a few people. The problem is that it's more difficult for companies to find the right people, industry experts said.

"There may be a lot of (commercial license) drivers out there but you don't want to hire someone else's problem," said Jim Runk, president of the Cumberland County-based Pennsylvania Motor Truck Association, a trade group representing trucking companies in the state.

Part of the issue is more stringent safety tracking regulations from the federal government that more quickly audit companies for infractions and make safety histories public. Known as CSA 2010, the regulations could cost trucking companies their insurance carriers or customers if they have too many infractions, executives said.

"Although it's painful, the industry will end up with better drivers who are paid better," said Peter Swan, an assistant professor of logistics and operations management at Penn State Harrisburg.

The new regulations make it harder for drivers and companies to cheat on their hours of operation, or to get a pass on other safety hazards, he said. That means it should be easier for companies that follow the letter of the law to succeed.

Right now, that's still a work in progress, some companies said.

"The biggest problem is getting shippers to work with you on the hours of service," said Paul Miller Jr., president of York County-based Paul Miller Trucking Inc. "We hold our (drivers) to 100 percent compliance."

The Spring Grove company uses GPS tracking on its trucks to make sure drivers are adhering to hours of service regulations that require mandatory rest periods, Miller said.

Some companies bend the rules to meet a shipper deadline, thereby undercutting the business of honest companies, he said. That's also one reason many companies stay with paper logbooks, he said. Without a computer monitoring the driver, its easier to fudge the hours on the road in the paper version, he said.

Still, Miller Trucking also has been hiring over the past several months as part of a multi-year growth strategy, Miller said. The company grew about 20 percent in 2011, he said. It has 65 trucks and wants to hit 100 trucks in the next couple years, he said.

Rebounding has been difficult for trucking companies because they cut many drivers and trucks from their fleets when the recession hit in 2008, executives said.

"Sometimes when you lose 10 or 15 percent in a bad economy, it takes you three or four years to get it back," Miller said.

Rebounding retail sales and manufacturing demand are creating work for trucking companies, according to a presentation to investors from John Larkin, a transportation analyst with St. Louis-based investment firm Stifel Nicolaus. However, because more than 170,000 trucks were taken off the road during the recession, there's a higher demand than there is capacity for trucking firms to haul the freight, Larkin said in the presentation.

That means companies filling an entire truck with their goods could see between a 3 percent and 10 percent increase in the cost of shipping this year, Larkin said. Less-than-truckload rates could increase between 2 percent and 6 percent, he said.

It all illustrates that more companies could be hiring in the months to come.

"(Trucking companies are) going to have to pick up drivers as freight increases," Swan said, "and it's increasing."

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