Transport Capital Partners Q4 2011 survey says increased rates and volumes remain intact

At a time when volumes and capacity are relatively tight, there is a fair amount of optimism in the trucking industry, according to the results of the Fourth Quarter 2011 Transport Capital Partners (TCP) Business Expectations Survey. 

Data for this survey was based on feedback from roughly 115 carriers, said TCP.

In this survey, TCP reported that 61 percent of its respondents expect volume gains in 2012, which is up from 45 percent in its previous survey which was conducted in August. The remaining 39 percent expect volumes to remain the same or decrease. Of that 39 percent, the number of carriers calling for volume decreases fell to 2 percent from 7.5 percent in the third quarter.

“I was pleasantly surprised that carriers’ optimism appears to have started to pick up again,” said Lana Batts, TCP partner, in an interview. “Given what is happening [in terms of confusion] on Wall Street and other indicators, it is apparent that tons don’t have to move much for there to be a capacity crunch.”

And aside from Wall Street fluctuations, other things impacting the overall economic outlook are the Euro crisis, and Congress’s debt committee failure, among others, as pointed out by TCP.

And with these things not fundamentally changing on a material level, Batts explained that carriers’ impression of the economy is akin to that in that most carriers are comfortable in calling for an increase in volumes rather than a decline.

Looking at rates, the TCP survey indicated that 50 percent of carriers said that roughly 50 percent of carriers had rate increases of 5 percent or more over the last three months, with 1 percent reporting an increase of 15 percent or more, and another 48 percent stating rates remained the same during that timeframe and another 3 percent with rate decreases.

And slightly more than 40 percent of carriers with annual revenues of $25 million or more said their rates increased by 5 percent, while 30 percent of carriers with annual revenues below $25 million also saw 5 percent rate gains. Close to 15 percent carriers at or above $25 million saw a ten percent rate gains, and about 5 percent at or below $25 million reported the same. A total of 5 percent of carriers at or under $25 million said they experienced rate decreases, which TCP said shows how smaller carriers are being “squeezed” on all sides.

With carriers more inclined to go after the most profitable freight, coupled with a heightened focus on yield management to recoup losses experienced during the Great Recession, Batts explained these processes are still largely intact.

“Carriers need to and can afford to do that,” said Batts. “More than 70 percent of carriers are telling us they are not adding capacity and for those that say they are, that figure is around 5 percent that say they are. That is not going to make up for those 3 years when nobody bought any trucks at all.”