Subscribe to our free, weekly email newsletter!


Message to shippers: rates will rise

By Michael Levans, Group Editorial Director
April 01, 2010

April signals the return of baseball and the release of our Annual Top 50 Trucking Companies Special Report, the preeminent inside look at the fiscal, operational, and mental health of some of the nation’s leading truckload (TL) and less-than-truckload (LTL) carriers.

To say that this Special Report is highly anticipated would be selling the work of veteran trucking journalist John Schulz a little short. In fact, this annual endeavor, which includes the coveted Top 50 carriers list (Top 25 TL & Top 25 LTL), is now the single best read feature posted on logisticsmgmt.com year after year—and that should come as no surprise.

Known for having one of the deepest—if not the deepest—contact lists in the trucking business, Schulz is able to get the nation’s leading trucking analysts and top carrier executives to open up in candid discussions. The results paint the most realistic picture of the market available. Needless to say, that picture from the carrier perspective has been consistently bleak over the past two years. Words like “brutal,” “horrid,” even “lethal” have been freely bandied about in our pages to describe the recent period in U.S. trucking.

This year Schulz rounded up some of the most vocal survivors of the two-year trough and set out to find if the recent positive economic news has yet to have an effect on the wealth of open capacity and the subsequent lower pricing so many shippers have been enjoying.

And just what did he find? Without giving away too much, many of the top analysts and trucking executives interviewed believe that—as indicated by recent general economic news and ATA tonnage reports—U.S. trucking is on the cusp of a steady and prolonged recovery. And with this turnaround will certainly come rate increases to match—anywhere from 3 percent to 5 percent over the next 12 months seems to be the consensus.

Schulz neatly analyzes the four issues (overcapacity, pricing, recapitalization, and diversification) that will drive prices back to levels that will allow carriers to stay above water and even reinvest.

As Schneider’s Mark Rourke stressed, “If you look at our industry’s lack of investment in equipment over the past couple of years…that’s unsustainable.” Con-way’s John Labrie puts it this way: “I would not call pricing irrational; in fact, it’s been very rational, reflecting supply and demand. But it needs to change in order for this asset-heavy business to recapitalize itself.”

“Let’s put it this way,” Schulz told me as he wrapped up his reporting, “trucking simply can’t go on with its current state of overcapacity and unsustainable pricing levels. In no uncertain terms, rates will rise.”

I would like to thank Satish Jindel and his team at SJ Consulting in Pittsburgh for again compiling our exclusive Top 50 list this year. This most comprehensive look at the U.S. trucking market begins on page 54S.

About the Author

image
Michael Levans
Group Editorial Director

Michael Levans is Group Editorial Director of Peerless Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at .(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

During this webcast our panelist offer logistics and supply chain professionals a “reality check” when it comes to our current state of understanding, adoption, and utilization of the technological tools that are available to improve our operations.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 55.7 in April (a level of 50 or higher indicates growth), which was up 1.2 percent compared to March, with economic activity in the non-manufacturing sector growing for the 75th consecutive month.

Total gross first quarter revenue for XPO was up 404.4 percent annually to $3.5 billion, with net revenue up 510.5 percent to $1.6 billion. While gross and net revenue were up, the company reported a net loss of $23.2 million, or $0.21 per diluted share and an adjusted net loss attributable to common shareholders of $9.3 million or $0.08 per share.

Regardless of capacity, pricing, or the economy, trucking industry regulations are never far from the freight transportation limelight. That is especially evident when it comes to the federally mandated hours-of-service (HOS) regulations. As usual, the current state of HOS remains somewhat fluid. And the reason for that has to do with legislation coming from the Senate Transportation Appropriations legislation that is currently being considered by the Senate.

At last week’s NASSTRAC Conference in Orlando, Fla., LM Group News Editor Jeff Berman caught up with Jack Holmes, president of UPS Freight, the less-than-truckload subsidiary of UPS. On June 30, Holmes will retire from UPS after a 37-year career with Big Brown that saw him rise from the overnight docks in Philadelphia to the executive suite in Richmond, Va.

Article Topics

Columns · Viewpoint · All topics

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA