MAHONING, SHENANGO VALLEYS Trucking business booming with economic upturn

An Austintown-based company has vehicles sitting idle because it can't find enough qualified drivers.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
They've struggled and suffered right along with the nation's beleaguered steel industry, but now some local trucking companies say business is picking up, and steel is part of the reason.
Jaro Transportation Services in Warren, for example, is investing $1.2 million to buy 20 new diesel tractors, expanding its fleet to accommodate a growing demand for its services.
New trucks also are on order for Strimbu Trucking in Brookfield. The company expects to spend between $2.5 million and $3 million on new tractors by September, and its fleet is running at capacity.
And Falcon Transport in Austintown is also experiencing a boom, said Don Constantini, president. "We have some equipment sitting idle," he said, "but that's only because we can't find enough drivers."
All three companies faced troubling declines in sales and profits in 2000 and 2001 when a national steel industry crisis forced more than 30 steel producers across the country to file for bankruptcy protection.
Diversifying
Jim Stiffy, Jaro president, said his company relied on steel for 95 percent of its business five years ago. Now, thanks to a concerted effort to diversify, Jaro has reduced its reliance on steel hauling to about 40 percent of its sales.
"That's the only way we've been able to survive," Stiffy said.
Jaro suffered losses when LTV, Wheeling-Pittsburgh and other steel mills filed for bankruptcy protection, he said, and it was forced to lay off drivers and take other cost-cutting measures last year.
Its business with aluminum and railroad equipment suppliers helped offset those losses, and its 2001 sales hit $18 million -- equal to its 1999 totals.
Stiffy said steel orders have been picking up since the first of the year, but Jaro managers remain cautious. "We're finally seeing a turnaround, but I don't know what to attribute it to," he said.
New tariffs approved by President Bush to protect domestic steel producers from cheap imports might be a factor, Stiffy said, and some steel users are just beginning to place new orders after using up their stockpiled supplies.
Officials at Jaro decided to invest in new tractors, he said, partially because it makes better financial sense than keeping and trying to maintain some of its older trucks. The plan will increase Jaro's 90-truck fleet by 10.
Strimbu Trucking relies on steel-related companies for 90 percent of its business, said Nick Strimbu III, executive vice president, and the steel slump hurt sales severely.
"We were dying on the vine over here," he said. "We had 35 to 40 trucks sitting idle. We tried to sell them, but the market for used trucks dried up, too."
Back up and running
The phones started ringing again in February, and now Strimbu said all 120 company-owned trucks are running at capacity, and its 35 independent contractors are also busy. The company travels to 48 states, but its biggest customers are Wheatland Tube, Sharon Tube and Duferco Farrell Corp., all in the Shenango Valley.
He said Strimbu officials decided to invest in new trucks now before new federal environmental rules take effect, forcing truck makers to add more costly emission control equipment to new vehicles.
The changes, set to take effect in October, are expected to increase purchase costs, maintenance costs and fuel consumption.
"We've been holding off on buying new for two years because of the uncertain economy," Strimbu said. "Now we're all keeping our fingers and toes crossed that this [upturn in the economy] is going to continue."
Falcon Transport depends on steel for about 40 percent of its business, said Constantini, and the auto industry is also a major part.
It listed LTV Steel, Bethlehem Steel and Trico Steel as customers before the three steel giants filed for bankruptcy protection. Forced to cut back, Falcon laid off some salaried and supervisory workers in 2001.
"Fortunately, not all our steel customers filed bankruptcy," he said, noting that U.S. Steel is one Falcon customer that remained strong through the industry crisis.
Drivers wanted
By early this year, Falcon saw its work orders increasing from both auto and steel customers.
"Now we're operating at capacity levels. We're maxed out," he said. "Our biggest problem, and the biggest problem in the industry in general, is finding qualified drivers."
Falcon has a training program for driver applicants who have completed basic training and are licensed as commercial drivers, Constantini said, but the company is always recruiting.
Strimbu agreed that finding drivers is a major obstacle. "It's been a problem for the last decade, and it just gets worse every year," he said.
vinarsky@vindy.com