Trucking news: TransCore says truck capacity hits a six-month high
May 24, 2011
Recent data from TransCore indicated that spot market truck capacity recorded its single highest weekly volume in the last six months.
The firm said that truck availability rose 8.0 percent on its DAT Network of load boards, with truck postings for all equipment types seeing gains, including: flatbeds up 8.4 percent; reefer vans up 8.3 percent, and dry vans are up 4.9 percent from the week of May 7 to the week of May 14.
TransCore also reported that with equipment capacity up, load volume saw a drop-off, with the overall load-to-truck ratio falling from 7.6 to 6.9 loads per available truck, and the ratios for reefers, dry vans, and flatbeds down 13 percent, 8.8 percent, and 7.5 percent on a week-to-week basis.
While spot market truck capacity is up, the industry is still up against some significant challenges, according to a recent research report from Avondale Partners analyst Donald Broughton.
“Unfortunately we see increases in operating costs as outpacing increases in rates in the short to intermediate term,” wrote Broughton. “Labor, fuel, depreciation / equipment rent and maintenance—all the largest line items a trucking company faces are accelerating faster than they can be recovered in rates in an environment of declining asset utilization. Unfortunately, costs don’t drive pricing; the balance (or imbalance) between capacity and demand drives pricing. Certainly demand is continuing to grow (although now at a decelerating rate), and while the market is tight, incremental capacity additions from a variety of factors have lowered the ceiling for pricing gains.”
And while the overall market is improving on an annual basis, there has been an ongoing trend of moderation in volumes of late, according to the American Trucking Associations’ (ATA) monthly tonnage reports and the Cass Information Systems Freight Index.
“We are at a very critical juncture right now, and I don’t know which way things are going to go,” said Mike Regan, CEO & Chairman of the Board, TranzAct Technologies, the author of LM’s “It’s Personal” blog. “With gas prices [mostly] rising and consumers pulling back, one of the issues you need to take a look at is the fact that consumers filling up their tanks once a week at these increased prices makes an impact on spending and freight volumes.”
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