Finance Co Sees Grim Days Ahead
Feb 21, 2001 12:00 PM, Modern Bulk Transporter staff
Boston-based Chancellor Co., a financial company that serves the transportation industry, said that market consolidation, an over-supply of trucks, rising fuel costs, and bankruptcies are all major factors affecting the entire trucking industry – and will continue to cause the industry heartburn.
Chancellor chairman and CEO Brian M. Adley said that the oversupply of used trucks and high fuel prices have negatively impacted the entire trucking industry, and that he expects industry conditions to continue to weaken. It is estimated, he said, that the U.S. market’s truck output could drop 45% to 130,000 units in 2001.
Bankruptcies, consolidation and cut-backs are sweeping the entire industry. A recent study by a major investment brokerage showed that the rate of bankruptcies in trucking hit a record high of 1,320 in the third quarter of 2000. In addition, there were 1,365 trucking companies that went bankrupt in the first two quarters, resulting in a total of 2,700 declaring bankruptcy through the third quarter of 2000.
Adley added that consolidations in the manufacturing, distribution and financial service industries have had a dramatic effect on the trucking and leasing sectors. The financial services industry is also experiencing major consolidation, as well as a slumping market, said Aldey.
Companies such as Citibank and General Electric are acquiring the likes of Associates First Capital, European American Bank, and others, all of which were major finance players for the trucking industry.