In The News

Survey: Truckers Optimism Still Up, Rate Increase Expectations High

A majority of carriers expect volumes to increase over the next year, and three-quarters expect rate increases, according to a study by the transportation consulting firm Transport Capital Partners.

TCP's Business Expectation Survey for the fourth quarter of 2010 found that 66% of surveyed carriers expect volumes to increase over the next year.

"At this time last year, about the same share of carriers expected volumes to increase, but a peak of almost 90 percent was hit in the second quarter of 2010," said Richard Mikes, TCP partner. Furthermore, Mikes noted that the hopefulness which characterized the spring has waned in recent quarters as economic growth has slowed.

With over three-quarters of carriers expecting rate increases in the next year, optimism remains high. This was the second highest level in two years.

"TCP's surveys from the last two years indicate that carriers have become more confident that volumes and rates will increase during the next year, despite the modest drop in the last two quarters," said Lana Batts, managing partner for TCP.

Mikes added "that shippers will be hard pressed not to accommodate cost pressures coupled with the restricted supply of trucks and drivers that is likely to continue."

"Larger carriers are more upbeat in this environment," observed Mikes. "More of the carriers over $25 million in revenue saw rates go up in the last three months than did the smaller carriers."

Seventy-five percent of the carriers over $25 million expect volumes to increase compared to 56 percent of the smaller carriers. Amazingly, thirty-eight percent of the smaller carriers expected volumes to decrease over the next 12 months.

"Smaller carriers are facing increasing fuel, equipment, and financing constraints and must recover more costs soon," Batts commented.

The disparity between large and small operators was reflected in future rate expectations as well, according to the survey. Eight-five percent of the larger carriers expect rate increases in the next 12 months compared to 65 percent of the smaller carriers. Twenty-nine percent of the smaller carriers expect rates to remain the same and 4 percent expect them to decrease. "Clearly the smaller carriers are pessimistic about sharing in increased volumes and rates," the survey concluded.

www.TruckingInfo.com