The financial disaster barreling down Wall Street could sideswipe shippers and carriers slogging through a two-year long downturn in the trucking industry.

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Carriers are already bracing for an even tougher road ahead. The American Trucking Associations forecast "a mild recession" in the United States after truck tonnage took a sharp turn downward in August.

"We are forecasting a mild recession later this year and early next year," said ATA Economist Bob Costello. "Make no mistake about it, freight volumes are weakening."

ATA's grim outlook came after several large trucking companies reported slower business levels in August. Some trucking executives say tonnage has remained poor in September.

The association considered the rippling effects of the recent bank shutdowns and buyouts threatening enough to weigh in on the Bush administration's failed $700 billion bailout proposal. The ATA said the rescue plan would not only have helped Wall Street but could have helped stabilize a trucking industry already ravaged by bankruptcies.

"Without legislation, the credit crunch will continue to worsen for our members, making it difficult for even those carriers with good credit to receive funding for capital expenditures like trucks and other equipment," said ATA President William Graves.

Steve Graham, vice president of market analysis for FTR Associates, a transportation consulting firm, said without an aggressive response from the government, money markets, credit markets and equity markets will be severely disrupted.

"With an economy already at or near a recession, the downturn would be deep and long," Graham said. "There's really no guarantee that even if a package was passed that credit flows will resume at a strong enough pace to keep the U.S. in positive territory. Even with stronger balance sheets, credit institutions might still be reluctant to lend to any but their best customers."

Trucking bankruptcies increased more than 100 percent in the second quarter of 2008 compared to the same period a year ago, said Wachovia Securities analyst Justin Yagerman in a recent report. Much of the increase is a result of high fuel prices and falling transportation rates.

The ATA's For-Hire Truck Tonnage Index fell 1.6 percent in August, the largest month-to-month drop since March. The ATA also said it revised downward its July index by 0.3 percent after it was seasonally adjusted to take into account recurring fluctuations in freight volume. In August, the seasonally adjusted tonnage index equaled 113.6, its lowest level since November 2007. The not-seasonally-adjusted index decreased 3.4 percent to 115.0 in August.

Carrier customers could start reeling further from the crisis as well, particularly truck brokers who have been relying on carriers to cut them slack on payment terms. Such brokers could start to see that leniency dry up.

"We're starting to tighten up our credit," said Danny Schnautz, operations manager for Clark Freight Lines in Pasadena, Texas. Schnautz says his company is starting to demand guarantees of debt payment in writing if there's a question about credit worthiness.

"There are two types of companies that don't pay, the ones that can't and the ones that won't. The ones that won't pay aren't affected as much (by tightening credit) because they don't pay anyway. It's the ones that tried to skate through until they were in a position to pay that will be most affected. They might have a heart of gold, but if their banks are tight with them and they ask us to help them out, we're not going to do that anymore."

Despite the dire outlook, Schnautz said he doesn't see the credit crunch to have much of an effect on his own company's operations. "We're a relatively conservative company, we don't hold debt that hurts us in any way. And if a tractor needs replacing, we replace it."

Chaos in the financial markets also isn't keeping Old Dominion Freight Lines from forging ahead with expansion plans into warehousing. The Thomasville, N.C.-based LTL carrier will open its first warehouse in Southern California Nov. 1. ODFL is thinking long-term: It says it plans to open 13 warehouses around the country over the next 10 years.

Along with storage, the 100,000-square foot facility in Commerce, Calif., will provide shipment consolidation, container deconsolidation and cross docking for LTL, truckload and air freight. The warehouse "allows us to not only service the Southern California market but also to participate in supply chains originating in the Far East," said Chris Reynolds, ODFL's director of warehousing.