Recruiter’s View

If shipments are up, and carriers are buying more trucks, and truck builders are busy, and truck parts are back- ordered, that means something good is happening, right?

I happened to be at a birthday party over the weekend, and being the fun-loving guy that I am, I spent a bunch of time talking to business owners about their businesses. (Stop! Stop! I know the invitations are already flooding in. My calendar is too full. There’s no way I can accept them all. Thank you, though. Thank you very much.)

Anyway, as we were talking, I heard a strangely optimistic tone to some of the stories.  

Oddly, two of the companies were involved with trucks; but the two companies – or the two owners – were geographically far apart, doing completely different things.

Here’s what they shared…

Packaging Is Positive

The first company is a carrier. The owner shared how strong his first quarter was. He told me how many cabs he was adding, and he also said he was purchasing ten times as many trailers.

“How was credit?” I asked.

“Surprisingly easy. It was simple.”

Wow.

I asked him what he was carrying. Answer: Paper goods. Finished paper goods. More specifically, packaging and containers.

Outstanding!

We have a trucking company adding all kinds of capacity in order to transport packaging materials. Guess what… The only reason companies buy packaging materials is because they are selling stuff that has to go into the packaging.

I’m going to take that as a major positive for our economy.

Trucks, Trucks, More Trucks

The other company (you aren’t going to believe this) makes trucks. Very custom work. Sometimes just a special chassis.

Here, again, business is good. (Of course it’s good, if trucking companies are out, beefing up their fleets like the first guy.)

Business would be better, if the necessary parts were readily available. How many times have we heard about parts shortages? This time it’s a key assembly that’s back-ordered for the entire industry.

To offset the shortage, this company is ordering on spec, anticipating its needs. It’s not working.

The reality is, demand is outstripping supply.

And why wouldn’t it? If all customers fear shortage, then all customers will increase their orders, making the problem even worse. If the suppliers don’t add capacity, then prices run up.

Recruiter’s View

We have been discussing for a year how weak inventories have become. U.S. companies have found that they can make more money with fewer sales if they simply continue cutting costs and maintaining their prices.

The reward for under-producing is the ability to charge more for the product that does get to market.

Harley-Davidson is a beautiful example of that. Sales get lower and lower. Earnings go higher and higher. More and more employees get laid off, and it just doesn’t matter.

Understand, I’m not talking about the two companies we learned about at the birthday party. I don’t know how they run their operations.

What we have learned from them is that demand is rising. Companies are continuing to make money. And they are visibly prepared to spend it on tangible stuff.

I see that as one more pressure pushing in favor of job creation. I mean, this can’t go on forever, right?

By the way… Each of these owners pointedly asked me about the other factor influencing job creation. They wanted to know my political leanings. I told them I’m pro-business, and I’d be real pleased to find a politician that feels the same way.

We’re getting there.