Continued from Roy Fruehauf's Speech to further Eisenhower Agenda.....
The ad stated that: “Last Year, the country’s 10 million trucks and trailers hauled the equivalent of 100 round trips to the sun with a 10-ton load. This represents a 200 per cent increase over the year 1940.
“To do this job, trucking has become America’s largest industrial employer and a leading public servant.
Today, motor transport moves 75 per cent of the nation’s freight, provides one of every 10 jobs, and spends almost $30 billion on wages and materials. Truck owners pay one-third of all motor vehicle taxes, and buy over 10 billion gallons of gas a year,” the ad concludes.
Now if you will pardon a personal aside, we would like to point out that while amazing has been the growth of trucks in use, the growth of the nation’s trailer fleet has been even more astounding.
For example, in 1940 there were only 130,000 freight-hauling trailers on our highways. By 1950
the trailer total had grown to 420,000. In 1955 it totaled 700,000. So, while trucks doubled in number of vehicles in the 15 years from 1940 to 1955 the trailer fleet grew to nearly 5 ½ times its 1940 total.
All this brings us to the threshold of 1956—and to the forecasts for Mr. Reed’s ten golden years ahead.
What do we see for motor transport in the next ten years?
Let me tell you first what some others think about our industry’s and the nation’s business prospects.
For example, Dr. Charles Taff, Professor of Transportation, University of Maryland, in his newly published textbook “Commercial Motor Transportation,” writes, “The phenomenal growth of commercial motor
transportation is one of the most significant economic developments of the 20th century.” He looks
forward in the years ahead to “a continuing growth rate for motor transportation that will accelerate even more sharply than the rate of growth of the national income.”
Several studies, notably that by the President’s Materials Policy Commission, have now been substantiated by the Joint Committee on the Economic Report, U.S. Congress, which forecasts a tremendous growth of the economy, including a 64 per cent growth in corporate products, by 1965—just ten years from now.
Looking over these reports—and after considerable research on its own—the staff of Standard and Poor’s Corporation, in a just published study, labels the years ahead as “the age of dynamic expansion.”
“In the future,” the study concludes, “we will have more of everything. Essentially this growing giant will require the same as it does today, except that it will need more, much more of nearly everything, particularly more raw materials, more power, more houses, more roads, more plants and tools, more food and more transportation.”
Is there any wonder the road ahead for motor transport is so bright and shining?
Ten years from today . . . in the year 1966 . . . we believe: The nation’s motor transport fleet, which now numbers 10 million vehicles, will grow to 15 million for a 50 per cent increase.
America’s freight trailer fleet, now 700,000, will be more than double. Many units in these fleets will be powered by the atom. There’ll be more and more plastic trailers. These trucks and trailers will be equipped with every conceivable safety device.
Piggybacking—which just began to grow in 1955—will become the biggest single revenue-producing factor for the nation’s railroads. The railroads in 1966 will have replaced the nation’s 716,000 boxcars
with flatcars each carrying two truck trailers.
Fishybacking, the carrying of loaded truck trailers on steamships, will grow to great importance along both coasts and on the St. Lawrence Seaway. Trailer ships will become more and more numerous.
By 1966 truck trailers will be carrying more than half of all the total freight being carried on railroads and highways. Motor transport, ten years from now, will be carrying 99 per cent of the nation’s mail on runs up to 300 miles. All this traffic will be moving over the most modern of highways.
In addition to the regular highways, superhighways will connect every section of the nation, making it possible to go from New York to San Francisco, Chicago to Miami without even seeing a traffic light.
These new highways will have special expressways for trucks and truck trailers. And on many other
highways specially colored concrete lanes will indicate the truck-trailer right of way.
Passing lanes will be built on more and more highways enabling the truck and trailer to turn out and allow faster traffic to go by. And our cities will be less congested. Underground garages and push-button
garages, which will store cars and bring them back automatically, will be helpful factors in reducing traffic.
There’ll be “truck streets” in the downtown areas. And the “no parking” signs for motorcars will be on many more streets.
Sidewalks will move—and more and more pedestrians will move underground under the traffic, on these rolling sidewalk conveyors.
And in the nation’s factories, truck-trailers, an essential part of present-day automation methods, will have an even greater role in producing more at less unit cost.
All these predictions for 1966 sound pretty exciting don’t they? Let me tell you briefly why I think every one of them will come true—many of them probably before 1966.
The first big reason for trucking’s expected growth is the baby boom. America is literally crawling with new babies. Last year births totaled a record 4 million plus. The population of the United States is now 167 million. By 1966 there will be 193 million Americans.
Dr. Wilfred Owen, of Brookings Institution, has estimated that for every person in the United States 16 tons of material like food, fuel, building materials and metals is consumed annually. On the basis of Dr. Owen’s estimate, we figure our fellow Americans in 1966 will need the astronomical total of over 3 billion tons of materials each year—or a total of 253 million truck-trailer loads.
Our second reason for this great belief in trucking’s potential is the steadily increasing trend toward suburbanization and suburban shopping centers. There are now 1,000 shopping centers in operation and 2,000 more are under construction or planned. Like the suburbs, these centers are not being built on or even near a railroad. Already 50,000 communities are supplied entirely by truck and trailer—and this number is growing steadily.
Other reasons for trucking’s growth are rooted in the increased use of trucking to carry the mail . . . the sweeping decentralization of industry . . . and for “piggybacking.”
By the end of 1955, 34 major railroads provided their customers with piggybacking service. Piggybacking—which means the elimination of millions of materials handling operations annually and thus more profits for the railroads—has been called the “greatest potential in trucking’s last two decades” by Marvin J. Barloon, Professor of Economics at Western Reserve University.
A still newer word in our business lingo is “fishybacking’ which is used to define the hauling of loaded truck-trailers on steamships. This has really just begun to catch on. For instance, four companies
have just announced plans to build 17 trailer ships to carry truck-trailers between New York, Los Angeles, other coastal ports and along the St. Lawrence Seaway.
The Maritime Administration is seeking to create an unavailable source of privately-owned roll-on, roll-off ships to provide ocean transportation for mobile military equipment—and the Office of Defense
Mobilization is granting fast tax write-offs to steamship companies.
Now a bit about highways. I know that you know we need new highways. Not only to carry our increasing number of motor cars and our important truck-trailer traffic, but also for the nation’s defense.
I firmly believe that our nation will build these sorely needed new highways. And when this program is adopted motor transport will get another healthy boost. You can’t build new highways without the truck-trailer. For example, the highways almost literally pour out of tank trailers carrying cement, asphalt and similar materials. In addition, dump trailers carry fill materials for low areas. The offices of contractors, and the emergency machine shops they set up to keep their apparatus in order, are housed in truck-trailers. The bulldozers, scrapers and cranes move on Carryall trailers. The steel for bridges comes to the site on trailers.
And when these highways are built, more and more truck-trailers will be riding them—carrying more and more freight more and more economically.
That brings me to my last point in the reasons for trucking’s expected growth. That point concerns the use of truck-trailers in automation. Truck-trailers fit into this picture of automation in more ways than you
can imagine. All over the country, in all kinds of industries—like Ford and Plymouth in Detroit and Admiral and Zenith here in Chicago, and more and more—truck-trailers are being woven, as integral parts, into industrial processes that are automation in its purest and best sense—because they are automatic processes designed to make the job easier and to save money for both industry and consumers.
All this adds up to a materially impressive case for trucking’s future—a future in which American bankers must certainly have a part. Although trucking is now a giant industry, most of its operators started as relatively small businessmen. They often had difficulty financing their expanding equipment needs.
I recall vividly a long talk recently in New York with one of the nation’s most important bankers. “Truck loans did not represent a good investment for us until a few years ago,” he said.
“Then several years ago,” he explained, “we decided to take another look at this growing trucking industry. We put together a comprehensive study—and, after looking at the facts, we changed our tune about the trucking industry.
“When truckers now come to see us they find that our loan officers have worked out constructive and imaginative approaches to their problems. Our people are now well advised on the unique factors underlying the trucking industry.”
As another banker on the West Coast said to me several weeks ago, “The trucking industry has surely come of age credit-wise in the last few years.”
There are several facets to the credit phase of the trucking industry. For instance, a trucker may need loans to bolster working capital . . . or for his equipment . . . or for new and expanding terminal facilities. And when you are talking about collateral, a truck-trailer is certainly a “good piece of collateral.” The truck-trailer is an exceptionally durable piece of equipment. Our stainless steel trailers are virtually indestructible. As a matter of fact, we have never had a report of one having worn out.
In our own company we have been lending money on trailers for over 25 years, in good times and bad, in depression, recession and boom. We know from long experience that the trailer is good collateral. In the
last seven years—from 1948 through 1955—we have financed $453 million on trailers—and on that nearly half a billion dollars of trailer loans our losses as of right now represent only two-tenths of one per cent.
Truckers and trucking have recently started to grow up. The trucker—who started years ago as the driver of his one truck—now owns hundreds or thousands. The companies are better managed too. As another banker ably expressed it, “Trucking management now includes better business men than ever in their
history—and they are still getting better. As in many industries, sound management in the trucking companies is noticeably on the increase.”
Another point I am certain you will be interested in is the fact that the trucker is a consistent user of bank credit. A Chicago banker explained this most colorfully when he said, “Right now we have borrowers coming in the windows. But that may not always be so. When we can’t get other borrowers, the truckers will still be with us.”
A thumbnail view of the industry’s credit problems is presented in the book, “Financing the Motor Carrier Industry,” published by the American Trucking Associations. The book states: “The simple fact is that earnings retained after taxes will not be sufficient, in the present era, to support a program of expansion such as the industry will need during the coming years.”
With your permission, may I point out that a reading of a trucking company’s balance sheet requires an understanding of the industry, particularly because the assets of the trucker differ from those usually found in the balance sheet of an ordinary business. For instance, the trucker doesn’t have inventories as such. His inventories consist of his accounts receivable and the equities in his equipment.
This is truly a dynamic industry operating in an age of dynamic national expansion. Truckers will need credit. Much credit—in the years ahead. The extending of this credit will require constructive knowledge of the industry by American bankers. It will require skillful credit management too.
May I respectfully suggest that all of you take a closer look at this industry whose road ahead is “so bright and shining.”
For it is true that we in trucking, like a number of other great American industries, stand on the threshold of a golden atomic-powered age in what is still the most exciting country in the world.
This brings much sober reflection. Winston Churchill, speaking before the British House of Parliament
several years back, said much of what I am now thinking when he declared: “Man in this moment of his history has emerged in greater supremacy over the forces of nature than ever has been dreamed of before. There lies before him—if he wishes—a golden era of peace and progress. All is in his hand. He has only to conquer his last and worst enemy—himself.”
The ad stated that: “Last Year, the country’s 10 million trucks and trailers hauled the equivalent of 100 round trips to the sun with a 10-ton load. This represents a 200 per cent increase over the year 1940.
“To do this job, trucking has become America’s largest industrial employer and a leading public servant.
Today, motor transport moves 75 per cent of the nation’s freight, provides one of every 10 jobs, and spends almost $30 billion on wages and materials. Truck owners pay one-third of all motor vehicle taxes, and buy over 10 billion gallons of gas a year,” the ad concludes.
Now if you will pardon a personal aside, we would like to point out that while amazing has been the growth of trucks in use, the growth of the nation’s trailer fleet has been even more astounding.
For example, in 1940 there were only 130,000 freight-hauling trailers on our highways. By 1950
the trailer total had grown to 420,000. In 1955 it totaled 700,000. So, while trucks doubled in number of vehicles in the 15 years from 1940 to 1955 the trailer fleet grew to nearly 5 ½ times its 1940 total.
All this brings us to the threshold of 1956—and to the forecasts for Mr. Reed’s ten golden years ahead.
What do we see for motor transport in the next ten years?
Let me tell you first what some others think about our industry’s and the nation’s business prospects.
For example, Dr. Charles Taff, Professor of Transportation, University of Maryland, in his newly published textbook “Commercial Motor Transportation,” writes, “The phenomenal growth of commercial motor
transportation is one of the most significant economic developments of the 20th century.” He looks
forward in the years ahead to “a continuing growth rate for motor transportation that will accelerate even more sharply than the rate of growth of the national income.”
Several studies, notably that by the President’s Materials Policy Commission, have now been substantiated by the Joint Committee on the Economic Report, U.S. Congress, which forecasts a tremendous growth of the economy, including a 64 per cent growth in corporate products, by 1965—just ten years from now.
Looking over these reports—and after considerable research on its own—the staff of Standard and Poor’s Corporation, in a just published study, labels the years ahead as “the age of dynamic expansion.”
“In the future,” the study concludes, “we will have more of everything. Essentially this growing giant will require the same as it does today, except that it will need more, much more of nearly everything, particularly more raw materials, more power, more houses, more roads, more plants and tools, more food and more transportation.”
Is there any wonder the road ahead for motor transport is so bright and shining?
Ten years from today . . . in the year 1966 . . . we believe: The nation’s motor transport fleet, which now numbers 10 million vehicles, will grow to 15 million for a 50 per cent increase.
America’s freight trailer fleet, now 700,000, will be more than double. Many units in these fleets will be powered by the atom. There’ll be more and more plastic trailers. These trucks and trailers will be equipped with every conceivable safety device.
Piggybacking—which just began to grow in 1955—will become the biggest single revenue-producing factor for the nation’s railroads. The railroads in 1966 will have replaced the nation’s 716,000 boxcars
with flatcars each carrying two truck trailers.
Fishybacking, the carrying of loaded truck trailers on steamships, will grow to great importance along both coasts and on the St. Lawrence Seaway. Trailer ships will become more and more numerous.
By 1966 truck trailers will be carrying more than half of all the total freight being carried on railroads and highways. Motor transport, ten years from now, will be carrying 99 per cent of the nation’s mail on runs up to 300 miles. All this traffic will be moving over the most modern of highways.
In addition to the regular highways, superhighways will connect every section of the nation, making it possible to go from New York to San Francisco, Chicago to Miami without even seeing a traffic light.
These new highways will have special expressways for trucks and truck trailers. And on many other
highways specially colored concrete lanes will indicate the truck-trailer right of way.
Passing lanes will be built on more and more highways enabling the truck and trailer to turn out and allow faster traffic to go by. And our cities will be less congested. Underground garages and push-button
garages, which will store cars and bring them back automatically, will be helpful factors in reducing traffic.
There’ll be “truck streets” in the downtown areas. And the “no parking” signs for motorcars will be on many more streets.
Sidewalks will move—and more and more pedestrians will move underground under the traffic, on these rolling sidewalk conveyors.
And in the nation’s factories, truck-trailers, an essential part of present-day automation methods, will have an even greater role in producing more at less unit cost.
All these predictions for 1966 sound pretty exciting don’t they? Let me tell you briefly why I think every one of them will come true—many of them probably before 1966.
The first big reason for trucking’s expected growth is the baby boom. America is literally crawling with new babies. Last year births totaled a record 4 million plus. The population of the United States is now 167 million. By 1966 there will be 193 million Americans.
Dr. Wilfred Owen, of Brookings Institution, has estimated that for every person in the United States 16 tons of material like food, fuel, building materials and metals is consumed annually. On the basis of Dr. Owen’s estimate, we figure our fellow Americans in 1966 will need the astronomical total of over 3 billion tons of materials each year—or a total of 253 million truck-trailer loads.
Our second reason for this great belief in trucking’s potential is the steadily increasing trend toward suburbanization and suburban shopping centers. There are now 1,000 shopping centers in operation and 2,000 more are under construction or planned. Like the suburbs, these centers are not being built on or even near a railroad. Already 50,000 communities are supplied entirely by truck and trailer—and this number is growing steadily.
Other reasons for trucking’s growth are rooted in the increased use of trucking to carry the mail . . . the sweeping decentralization of industry . . . and for “piggybacking.”
By the end of 1955, 34 major railroads provided their customers with piggybacking service. Piggybacking—which means the elimination of millions of materials handling operations annually and thus more profits for the railroads—has been called the “greatest potential in trucking’s last two decades” by Marvin J. Barloon, Professor of Economics at Western Reserve University.
A still newer word in our business lingo is “fishybacking’ which is used to define the hauling of loaded truck-trailers on steamships. This has really just begun to catch on. For instance, four companies
have just announced plans to build 17 trailer ships to carry truck-trailers between New York, Los Angeles, other coastal ports and along the St. Lawrence Seaway.
The Maritime Administration is seeking to create an unavailable source of privately-owned roll-on, roll-off ships to provide ocean transportation for mobile military equipment—and the Office of Defense
Mobilization is granting fast tax write-offs to steamship companies.
Now a bit about highways. I know that you know we need new highways. Not only to carry our increasing number of motor cars and our important truck-trailer traffic, but also for the nation’s defense.
I firmly believe that our nation will build these sorely needed new highways. And when this program is adopted motor transport will get another healthy boost. You can’t build new highways without the truck-trailer. For example, the highways almost literally pour out of tank trailers carrying cement, asphalt and similar materials. In addition, dump trailers carry fill materials for low areas. The offices of contractors, and the emergency machine shops they set up to keep their apparatus in order, are housed in truck-trailers. The bulldozers, scrapers and cranes move on Carryall trailers. The steel for bridges comes to the site on trailers.
And when these highways are built, more and more truck-trailers will be riding them—carrying more and more freight more and more economically.
That brings me to my last point in the reasons for trucking’s expected growth. That point concerns the use of truck-trailers in automation. Truck-trailers fit into this picture of automation in more ways than you
can imagine. All over the country, in all kinds of industries—like Ford and Plymouth in Detroit and Admiral and Zenith here in Chicago, and more and more—truck-trailers are being woven, as integral parts, into industrial processes that are automation in its purest and best sense—because they are automatic processes designed to make the job easier and to save money for both industry and consumers.
All this adds up to a materially impressive case for trucking’s future—a future in which American bankers must certainly have a part. Although trucking is now a giant industry, most of its operators started as relatively small businessmen. They often had difficulty financing their expanding equipment needs.
I recall vividly a long talk recently in New York with one of the nation’s most important bankers. “Truck loans did not represent a good investment for us until a few years ago,” he said.
“Then several years ago,” he explained, “we decided to take another look at this growing trucking industry. We put together a comprehensive study—and, after looking at the facts, we changed our tune about the trucking industry.
“When truckers now come to see us they find that our loan officers have worked out constructive and imaginative approaches to their problems. Our people are now well advised on the unique factors underlying the trucking industry.”
As another banker on the West Coast said to me several weeks ago, “The trucking industry has surely come of age credit-wise in the last few years.”
There are several facets to the credit phase of the trucking industry. For instance, a trucker may need loans to bolster working capital . . . or for his equipment . . . or for new and expanding terminal facilities. And when you are talking about collateral, a truck-trailer is certainly a “good piece of collateral.” The truck-trailer is an exceptionally durable piece of equipment. Our stainless steel trailers are virtually indestructible. As a matter of fact, we have never had a report of one having worn out.
In our own company we have been lending money on trailers for over 25 years, in good times and bad, in depression, recession and boom. We know from long experience that the trailer is good collateral. In the
last seven years—from 1948 through 1955—we have financed $453 million on trailers—and on that nearly half a billion dollars of trailer loans our losses as of right now represent only two-tenths of one per cent.
Truckers and trucking have recently started to grow up. The trucker—who started years ago as the driver of his one truck—now owns hundreds or thousands. The companies are better managed too. As another banker ably expressed it, “Trucking management now includes better business men than ever in their
history—and they are still getting better. As in many industries, sound management in the trucking companies is noticeably on the increase.”
Another point I am certain you will be interested in is the fact that the trucker is a consistent user of bank credit. A Chicago banker explained this most colorfully when he said, “Right now we have borrowers coming in the windows. But that may not always be so. When we can’t get other borrowers, the truckers will still be with us.”
A thumbnail view of the industry’s credit problems is presented in the book, “Financing the Motor Carrier Industry,” published by the American Trucking Associations. The book states: “The simple fact is that earnings retained after taxes will not be sufficient, in the present era, to support a program of expansion such as the industry will need during the coming years.”
With your permission, may I point out that a reading of a trucking company’s balance sheet requires an understanding of the industry, particularly because the assets of the trucker differ from those usually found in the balance sheet of an ordinary business. For instance, the trucker doesn’t have inventories as such. His inventories consist of his accounts receivable and the equities in his equipment.
This is truly a dynamic industry operating in an age of dynamic national expansion. Truckers will need credit. Much credit—in the years ahead. The extending of this credit will require constructive knowledge of the industry by American bankers. It will require skillful credit management too.
May I respectfully suggest that all of you take a closer look at this industry whose road ahead is “so bright and shining.”
For it is true that we in trucking, like a number of other great American industries, stand on the threshold of a golden atomic-powered age in what is still the most exciting country in the world.
This brings much sober reflection. Winston Churchill, speaking before the British House of Parliament
several years back, said much of what I am now thinking when he declared: “Man in this moment of his history has emerged in greater supremacy over the forces of nature than ever has been dreamed of before. There lies before him—if he wishes—a golden era of peace and progress. All is in his hand. He has only to conquer his last and worst enemy—himself.”
