Freight rates stable for now, but fleets see higher rates coming
Mar 13, 2013 12:42 PM
Results from Transport Capital Partners’ (TCP) First Quarter 2013 Business Expectations Survey found that a majority of carriers (76.6%) report rates remaining the same for the past three months. The survey results show that carriers are optimistic, with nearly two-thirds of carriers expecting volumes and rates to increase in the next 12 months.
Twelve percent of the carriers surveyed indicate that rates have decreased, however. Most of the reported decreases came from carriers with less than $25 million in revenue. These results point towards a slower road to economic recovery for many in the trucking industry.
“With the present tight slight supply of trucks, an increase of just 1%-2% over forecasted GDP could spike rates upwards at anytime which would help to cover costs,” says Richard Mikes, TCP partner and survey author.
For the first time since February of 2012, the trend line for carriers expecting rates to increase over the next twelve months went up. Thirty-seven percent of respondents think that rates will remain flat. This optimistic outlook is similar for both large and small carriers.
“This optimism is tempered by concerns expressed at the recent Truckload Carriers Association Conference,” says Steven Dutro, TCP partner. “The limited availability of drivers and the impact of HOS (hours-of-service) rules that take effect this summer will limit asset utilization and raise operating costs,”
This optimistic view on rates reflects that slightly over half of carriers believe that volumes will increase. Volumes are expected to increase, reversing the pessimistic trend since February of 2012.
“We see this reversal of volume expectations assisting carriers battling against the headwinds of driver shortages, adverse regulations, and cost pressures from 2012 and earlier this year,” Mikes says.
While this quarter's survey reflected optimism from most carriers, the next several months will be telling for the industry. “The economy appears to be shaking off the government spending 'sequestration' by adding jobs and continuing to grow,” Dutro says. “If this changes, it will impact the positive expectations we see in this survey. The results from next quarter’s survey will be interesting.”
The next Business Expectations Survey will launch in May 2013. Carriers interested in participating should visit transportcap.com/industry-survey for more information.
© 2013 Penton Media Inc.