This state-of-the-art business model combined with a new state-of-the-art, “big truck” sales and service facility,” is set to provide new work for 8000 drivers and trucking industry workers.”
GULFPORT, Miss.–(BUSINESS WIRE)–American Truck Group, (ATG) perhaps the nation’s largest “big truck” sales and service dealership, is gearing up to rescue an ailing trucking industry. The ills of which find it in an unusual predicament. While many industries, in our job-starved economy, are looking for more work to be done by less workers, the trucking industry is looking for more workers – specifically drivers – to handle more work.
“The population is growing and with it comes a growing demand for staple goods.”
A recent Bloomberg report reveals a shocking statistic. Referencing a comment by Noel Perry, managing director at consulting firm FTR Associates in Nashville, there is a growing shortfall of drivers, one that could reach a staggering 300,000 within one year.
Some experts attribute a driver shortage to a growing economy. But, when we asked Louis Normand, owner of privately-held ATG to comment, Normand made two points. “The population is growing and with it comes a growing demand for staple goods.” Secondly, “online shopping is replacing the tedium of many shopping trips meaning an increased number of truck rides for goods to reach our door.”
While this sounds like a great problem to have, the driver shortage is beginning to produce strong headwinds for economic recovery. It doesn’t take a genius to see too much freight and not enough drivers results in higher shipping costs. This causes hundreds of shippers now, to make a rotten choice between poor customer service or higher freight costs.
To the average onlooker, the situation makes no sense. If you need more drivers – hire more drivers! Easier said than done. Absent political discussion, the cost of employees to drive company-owned rigs has become more prohibitive than contracting with owner operators. So much so, the industry seems to have grown comfortable with its own inefficiencies. In the end, the consumer is left holding the bag as higher costs and poor service get passed down to the last truck stop.
Still the situation seems easy to address. With so much demand for owner-operated rigs, “why the shortage?” Indeed, there are thousands of drivers willing to own and operate. The problem is, of the thousands of willing there are but a handful who are able. With the average cost of a new rig running $125,000 plus, and in this era of tight money, financing is almost impossible. This is a major problem.
With a mindset that problems are just solutions waiting to be found, Louis Normand, owner of the American Truck Group, found that solution! The simplicity of the resultant strategy makes it genius. If drivers can’t afford to buy, rent them a totally reconditioned late model rig, just like you would rent a U-Haul. And, to keep drivers motivated and ever in search of more work, add a service contract and an ownership option to the rental agreement.
Twelve years later, a mega-fleet of rented-to-one-day-own trucks, is now gobbling up millions of freight miles every year. With numbers near 500 trucks, and now backed by a brand new state-of-the-art sales and service facility, the fleet is set grow to more than 1200 trucks.
According to Normand, ATG’s expansion is set to provide new work for as many as 8000 drivers and industry workers. Driver jobs alone could number in excess of 1400 as regulations, limiting daily driving hours, likely means two driver jobs for each new rig. Add in more shifts at distribution centers, more warehouse workers, more bookkeepers, more mechanics and soon you arrive at what Normand refers to as, “the jobs trickle-up effect.”
The logistics of operating this growing fleet are many but manageable with the right infrastructure in place. You need ultra-modern service facilities, partner facilities and highly trained technicians to keep the massive highway gobbling machine working. “When the truck stops the buck stops,” says Normand. “For all of us.”
When asked what ATG’s greatest obstacle now is to fleet expansion, Normand points again to tight money policies. “Someone still has to own the truck. Our business model just doesn’t fit the typical commercial loan profile.” So far, this has not deterred ATG from its plans to expand. Having, for years, patched together a commercial lines of credit and loans from private lenders, ATG is prepared to expand at a rate the money supply dictates.
Says Normand, “since we built our new facility and announced plans to expand, we’ve been pleasantly surprised by current lenders who have come forward to tell us they want to own more trucks.” Says one truck note owner, “I’ve been waiting for an excuse to pull more money out of stocks and put it into notes collateralized by real property, rental income and a growing demand.” Normand says, “at any given time, there’s a backlog of 200 drivers waiting to take delivery of their new job – their truck.”
With an economy so struggling to grow, this is a prime example of the kind of innovation that can create American jobs and economic recovery. So keep hope America. With a virtually unlimited potential for growth, this Mississippi Mega Truck Fleet is about to supercharge the entire economy.