NASHVILLE, Tenn. — At one point last year, it looked as if fuel surcharges were going to be history.

Even though diesel was skyrocketing, a lot of American shippers saw that truckers were dropping rates just to stay alive, so many of them opted to hold back on paying fuel surcharges. They simply said no.

Truckers wised up and responded by yanking trucks off the road.

First thing the shippers knew, they couldn’t find anybody to carry their freight, so they agreed to pay the full bills — avec surcharges — again. Then, the price of fuel dropped.

The past 12 months have been a humdinger of a year for truckers. And the fuel surcharge roundabout was only one of the curves and loops that the roller coaster otherwise known as the for-hire trucking industry rode.

Donald Broughton, a trucking analyst and managing director of the Avondale Partners, based in Tennessee, just released a very substantial look at the industry, and the title says it all: "Still Driving Into The Ditch: Record Number of Trucks Exit Highways in 2008."

The report — entirely American by the way — says that our neighbors to the south lost almost two percent of the OTR industry in the third quarter alone. In total last year, more than 127,000 trucks were taken out of service across the States. That represented about 6.5 percent of the industry. It’s also an all-time record for the industry.

Those that survive will see better days around the bend

More individual companies went broke back in the 2001-2002 downturn, but they were smaller operators.

This time, fewer companies went down but the huge capacity decrease came from larger fleets culling the herds.

The upside is, even though Avondale’s not predicting growth in the economy in general, the report says that if you’ve made it this far, the next little while could be a very good time to be among trucking.

According to Broughton, "if 4Q continues to develop at the current pace, 2008 will become the worst year to be a marginal trucker and could be the best year to have survived."

The report continues: "We believe truckers will begin to show pricing power, in addition to extending the asset utilization gains and that earning estimates will creep higher as a result. We find this especially easy to predict."

Some of the other changes reported by Avondale?

Fewer truckers and suppliers feel they can plan long-term. So the ones who do will emerge victorious. "As difficult as it may be, we continue to assert that those truckers and shippers who choose to continue to make decisions strategically will emerge from the current period positioned to outpace their competition in 2009 and 2010.

"Many of what we consider to be the more astute shippers are sensing the change in tide and have begun negotiating multi-year deals which offer guarantees of volume [today] in exchange for guarantees of capacity and a limit on the rate of increase in base pricing in coming years.

One of the more interesting suggestions, noted by the study, was the use of a rolling contract in which for every quarter of benefit to the trucker, the term under which the shipper would enjoy guaranteed capacity and limits to pricing were extended another quarter.

Sharp operators will also be looking inwardly for streamlining their operations too, says Broughton. "What we consider the most astute truckers are preparing for the turn in tide by doing two things — shoring up the strength of both financial balance sheet and improving the quality of the operating balance sheet."

Job one? Retire debt without retiring your borrowing capacity. The report’s full of great stuff like that.