Carriers plan for tight credit, lower volumes, and fewer truck purchases

A national business expectations survey conducted recently by Transport Capital Partners (TCP) revealed that carriers are adjusting to the new economic environment and most expect the adjustment phase to continue through 2009.

The survey, which aimed to summarize 2009 expectations for the transportation industry, received a high response rate from carriers with diverse geographic and operational characteristics. The response regarding the freight environment was tempered toward the downside, with 33.8% of respondents expecting business volumes to decrease. Only 16.5% expect an increase in 2009 compared with 2008. Of the responding carriers, 37.7% thought volumes would remain the same.

Most respondents (54%) expect credit availability to tighten in 2009 versus 2008. A small group (11%) thought it could improve, with 23.6% expecting it to remain the same.

Projected equipment purchasing plans are low. Two-thirds of the carriers that responded are expecting to replace less than 20% of their tractors in 2009, while 17.3% plan to replace 20-40%, and only 9.4% indicated plans to pre-buy in anticipation of 2010 engine standards.

Rate increases will remain about the same in 2009, according to 55% of the carriers. Another 12.5% anticipate an improvement and 20% forecast a decrease.

The majority of respondents expect fuel surcharges to cover 80 to 95% of increased fuel costs, while about 20% expect them to cover about 95% or more. About the same number felt less than 80% of the costs would be covered.

Respondents reported fleet sizes spread across five revenue categories, from under $10 million to over $100 million. Approximately half the carriers chose “general carrier-diversified with no long-term contracts” to describe their company and 20.4% chose “core-carrier — primary position out of specific origins.”