Trucking business cluster helps local economy

A semitruck sits for sale at DAD’s Truck and Tractor Sales at exit 113 near Idaho Falls on Sept. 20. John Roark /

A semitruck drives over an overpass at exit 113 near Idaho Falls on Sept. 20. John Roark /

A man checks out semitruck for sale at Peterbilt at exit 113 near Idaho Falls on Sept. 20. John Roark /

Over the last two decades, a regional hub for the trucking industry has developed around exit 113 along Interstate 15.

The area surrounding the off-ramp, near Melaleuca’s headquarters, has grown from a few companies to a major development with two truck stops, several semi dealers and maintenance operations, a handful of trucking fleet operators, and several warehouse and manufacturing companies that rely on shipping.

Economists refer to this behavior — where many similar businesses, often including competitors, group into a common geographical area — as “clustering.”

As an article in The Economist explained in 2009, a group of businesses gain a number of important advantages by clustering in the same area. Those benefits include a nearby specialized labor force that the businesses can compete over, easy access to component suppliers such as parts dealers, and important information channels from trade journals to gossip at neighborhood eating establishments and bars.


The proximity has made it easier for companies such as Doug Andrus Distributing, the largest Idaho-based trucking company, to access maintenance services while providing enough demand for dealerships such as Freightliner, which built a new store just over a year ago, to open new locations.

Jason Andrus, co-owner and CFO of Doug Andrus Distributing, said the dealerships have been of great help to his company.

“Our company needs a lot of those services,” he said. “Prior to all that happening, we were taking our trucks and trailers to Boise and Salt Lake City (for maintenance).”

That’s true for dealerships as well, said Craig Schow, corporate operations director for Schow’s Truck and Equipment, a chain of truck dealerships with locations in southern Idaho and Utah, including one near exit 113.

“Being next to a truck stop, those customers are looking for a place to get warrantied work done or get a quick fix,” he said.

One of the newest additions to the cluster is a Freightliner dealership.

“We were servicing a number of customers in this area already, so it made sense to put in a building,” Parts Manager Tyler Lott said.


The dealerships near exit 113 have been driven to expand by a recent shift toward the purchase of new trucks, members of the industry said, and it’s been driven in part by the long-term effects of a decade-old regulatory change.

Ahead of stronger emissions standards for new trucks, which took effect in 2007, used trucks (which were exempt from the standards) were in high demand, and beginning in 2007 many trucking companies put off purchasing new trucks.

Andrus said that trend has begun to reverse, however. Initially, trucks that complied with the tougher standards were both more expensive and had lower fuel economy. It was a lose-lose deal for trucking companies to purchase one of the cleaner vehicles.

But those higher standards drove innovation, and new trucks now coming into the market are much more fuel efficient. The upfront expense remains high, but lower fuel costs over time make them an attractive investment.

“Now I think we’re seeing a lot of replacement,” Andrus said.

That’s consistent with a recent assessment by Commercial Carrier Journal, an industry trade publication, which predicted earlier this month that used truck prices are likely to decline soon as companies sell old trucks and buy new ones. New trucks typically cost between $145,000 and $175,000, while used 2015 models (which often have upward of 300,000 miles on them) typically go for closer to $80,000.

Schow said the local used truck market has also been hurt by slowdowns in the Bakken oil fields in North Dakota.

The lucrative opportunities there drove many independent drivers to purchase used trucks to work transporting oil, gas, water and fracking fluid. The slowdown dried up that market, Schow said, although it has revived somewhat over the last six months.

Driver shortage

For all the expansion in dealerships, expansion in transportation employment has been lackluster.

Trucking in Idaho has seen relatively slow employment growth since the end of the Great Recession. Since 2010, statewide employment in transportation, warehousing and utilities has grown by an average of 1.7 percent each year, according to Bureau of Labor Statistics data. The growth in Idaho Falls has been identical over that period.

Idaho Falls is home to about 2,100 individuals employed in the industry, about 8.7 percent of the state’s total. But the region could support many more such jobs.

Those in the industry say slow growth hasn’t been the result of low demand, but rather of a shortage of qualified drivers.

“There’s a severe shortage of drivers,” Andrus said. “I’ve been working here 20 years, and it’s the most severe I’ve ever seen. There’s a lot of freight out there to be hauled, and all the companies are having a tough time getting enough drivers to meet the needs of the customers.”

Andrus said the shortage is so acute at the moment that his company is trying new strategies to find drivers. The company announced Friday that those who refer new drivers to the company will be entered in a raffle where a new car will be given away.