Subscribe to our free, weekly email newsletter!


A watchful eye on capacity always needs to be open, say trucking industry stakeholders

By Jeff Berman, Group News Editor
October 09, 2013

When addressing how, if, why, or when motor carriers plan to increase capacity, it is pretty clear there are many things standing in the way of doing so, intentions aside.

These things include: the economy; driver hiring, availability, training and retention; demand; and the increasing amount of regulations the industry faces. There are other things, too, of course, so this can be viewed as a short list.

At the recent FTR Transportation Conference in Indianapolis, there were widespread views regarding market factors germane to capacity expansion.

Small-to-mid-size carriers, explained Annette Sandberg, CEO of TransSafe Consulting LLC and former Deputy Administrator and Administrator of the Federal Motor Carrier Safety Administration, explained that small-to-mid-sized carriers are feeling the impact of regulations like the Hours-of-Service regulation that kicked in last July and CSA, among others. And on the capacity side, Sandberg noted that this has led to carriers of this size having concerns over losing loads to larger carriers.

Even with slow economic growth, coupled with the federal government shutdown, capacity availability has been “tight but predictable due to the moderate recovery, but available pockets here and there make it more predictable in helping to find trucks,” said Jim Tucker, COO of Tucker Worldwide, a global freight brokerage services provider. 

Tucker added that there concerns remain on the supply side for carriers and how to deal with ongoing lack of available drivers.

And the overall sentiment from both carriers and shippers at the conference was that some type of capacity crunch does appear to be inevitable.

John Vesco, executive vice president for Comtrak, a subsidiary of intermodal services provider, the Hub Group, explained that with a capacity crunch likely coming down the road, it is imperative to be prepared for it, especially as Owner-Operators exit the business, due largely to cost pressures.

“Drivers are a precious commodity that we want to hold on to, especially the good ones,” he said. “With HOS and CSA, it is clear things are going to tighten up, and you want to have the best drivers out there for service and reliability.”

Stifel Nicolaus analyst John Larkin observed that strong driver recruiting is the best way to keep driver capacity utilization at bay, with the largest and most sophisticated carriers doing the best job to recruit experienced drivers, as well as offer driver training programs.

Ways to increase capacity cited by Larkin include getting them home regularly, new trucks, and a competitive pay scale.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

APICS and ASTL said they have signed off on an agreement in which AST&L will merge with APICS upon ratification by an AST&L member vote.

The average price per gallon of diesel rose 4.3 cents to $2.854 per gallon, following gains of 3.1 cents and 2.6 cents, respectively, the previous two weeks for a cumulative ten cent gain over the last three weeks.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 57.8 in April which was 1.3 percent above March and also 0.5 percent above the 12-month average of 57.3. Economic activity in the non-manufacturing sector has grown for the last 63 months, according to ISM.

Non asset-based 3PL XPO Logistics reported solid first quarter earnings last night, with total gross revenue seeing a 148.9 percent annual gain at $703.0 million and net revenue up 349.0 percent to $262.2 million. Despite the significant gains in total gross revenue and net revenue, the company had a $14.7 million quarterly net loss, which marked an improvement compared to a $28.3 million net loss a year ago.

So far, so good may be the best way to describe the current state of progress in the negotiating process regarding the announcement made last month by FedEx that it plans to acquire Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator for $4.8 billion.

Article Topics

News · Trucking · FTR Associates · Capacity · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA