Transport Capital Partners LLC (TCP) has completed its Business Expectation Survey for the third quarter of 2010. While politicians debate future tax and healthcare policies, the results of the survey indicate that more than half of truckers interviewed have not rethought their future business plans.
“Only about a quarter of the carriers say they are planning to change their business model in this uncertain environment, while the other quarter of respondents plan to take capital gain dividends, sell assets, or sell their firms in 2010,” said Richard Mikes, TCP partner.
TCP uses the quarterly survey to collect insights and opinions of executives nationwide in order to report on the current state of the industry and future expectations.
“Both large and small carriers report similar plans to cope, while the numbers of carriers considering leaving the industry if volumes don’t improve over the next six months rose from 13% to 16% from the last quarter surveyed,” said Lana Batts, partner for TCP.
“While overall carrier interest in selling remained unchanged from the last several quarters at 20%, size clearly matters in this case,” said Mikes. “Thirty percent of carriers under $25 million in revenue are interested in selling, while only 14% of those above that level responded they would consider selling.”
“These results mirror our present M & A activity with smaller carriers who ask our partners about their options for the future more often than larger carriers,” said Batts.
The number of respondents who say they would consider buying fell slightly from 38% to 36% this quarter, and TCP expects to see more merger and acquisition activity as carriers try to cope and take advantage of the new environment.
“Maybe the somewhat diminished outlook by smaller carriers for rates and volumes has dampened their expectations for expansion, whether it is in truck count or acquiring another carrier,” said Mikes.
Both Mikes and Batts question whether the recent slowdown in freight increases, coupled with the uncertain political and economic outlook, may be responsible for decreased carrier optimism levels.
More information is available at www.transportcap.com.