Message to shippers: rates will rise

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.