The recent Q3 2011 Transport Capital Partners (TCP) Business Expectations Survey found that carriers’ contractor fleets have remained steady over the last three quarters. However, the ability for fleets to expand using contractors has been trending down for the last five quarters.
Forty-one percent of fleets responding to the survey see their contractor fleets remaining stable, with the same number reported in November of 2010. Since a year ago, the number of fleets seeking to expand through the use of contractors has trended down from 28% to 22.4%.
Richard Mikes, TCP partner and survey director, says that “Contractors have been devastated by the recession and higher fuel prices. Consequently they have exited the business in large numbers. Now, the combination of higher priced new equipment, scarce used low mileage equipment, and lack of credit are deterring new or re-entrants.”
Lana Batts, TCP partner, notes that “Seventy percent of carriers reported some level of driver shortage, yet fewer are seeing contractors as the answer over the past year.”
Fleet size made little difference in these trends except that about 36% of carriers under $25 million in annual revenue reported not using independent contractors (I/C's), while about 24% of larger carriers reported not using I/C's.
Mikes observes that “This quarter’s survey reflects the general lack of confidence in the economy, with carriers expecting less increases in volumes over the next 12 months compared to prior surveys. Additionally, carriers do not see enough profits to justify investing in new equipment and it is no surprise that contractors are not reappearing.”