Quarterly Trucking Transportation Market Update: Is the Party Over?

Shippers are benefiting from temporary excess capacity in the truckload market, but analysts say this condition is temporary. The driver situation, increasing regulations, and inventory sell-offs all point to a tighter capacity situation in 2017 and beyond.

By ·
Download Article PDF

It’s a buyer’s market right now in the trucking industry, particularly in the $320 billion truckload (TL) sector. Excessive inventory and a less-than-robust overall economy are causing excess capacity, which is resulting in some carriers straining to keep their trucks somewhat full by aggressively cutting rates.

According to John Larkin, the veteran trucking analyst with Stifel Inc., the current freight market “remains weak,” with “soft volumes” and very little evidence of the seasonal uptick that we tend to see during the normally robust second and third quarters. The situation is even causing some shippers to press their carriers for further rate discounts.

But a confluence of factors, including what Larkin calls a “cavalcade” of pending federal trucking regulations, may cause financial headwinds, particularly for smaller, lesser-capitalized truckload carriers.

“Some fear that we may be approaching the limit on how far down prices can be pushed without harming the supply of capacity from the smaller carriers,” Larkin warns. Those smaller TL carriers continue to suffer negative setbacks of such price wars due to their higher unit cost structure when compared to the larger, better capitalized carriers.

SUBSCRIBERS: Click here to download PDF of the full article.


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!

Latest Whitepaper
The Essential Guide to High Value, Low TCO WMS on the Fast Track
A warehouse could become your weakest link if you can’t execute with speed and accuracy. Your bottom line will be negatively impacted, so will your customer’s experience, and they are only one click away from buying from your competitors!
Download Today!
From the November 2017 Logistics Management Magazine Issue
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships into true, collaborative partnerships—and greatly strengthened its logistics and supply chain operations in the process.
34th Annual Quest for Quality Awards: 2017 Awards Dinner
Trucking Regulations: Washington U-Turns; States put hammer down
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Logistics Showcase: Rising to the same-day delivery challenge
Today’s delivery puzzles are very different than traditional DC to store or warehouse to DC puzzles. It’s not just the shorter time frame for delivery; the basic requirements are significantly different and more complex as well. In this session you'll learn how to address same day delivery challenges while also driving down costs and increasing customer satisfaction.
Register Today!
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...