CONTINUED CONCERN OVER FUTURE CAPACITY
By Jeff Thomas, 4/27/2009
We have been speculating about what will happen with trucking capacity since the middle of last year. In the most recent quarter, supply and demand have both been racing downward at breakneck pace. As a result, industry analysts, trucking companies and shippers are attempting to predict what the landscape will look like when we achieve a more balanced market place.
In a recent article in the Journal of Commerce, statistics released from a report by Transport Capital Partners indicated some fairly significant trends:
As previously reported, we saw a large number of Truckload (TL) carriers leave the marketplace in 2008, and this report seems to indicate that number will continue to grow at a rapid pace without significant improvement in the overall economy.
There is an equal amount of speculation and unrest in the Less-Than-Truckload (LTL) sector. YRC, which contains the former entities of Roadway and Yellow, has experienced well-documented financial difficulties over the past 18 months. The company recently made cost-cutting measures in many areas, even securing an agreement with the Teamsters to reduce wages. Fortunately, YRC has received a great deal of cooperation from their banking partners to date. The next milestone will come at the end of the 2nd quarter of 2009; current loan covenants require the company to turn a profit during that quarter.
We at M33 are consistently monitoring developments, and will continue to update you as events occur that may impact your transportation program and your business. Jeff Thomas is the Director of Carrier Pricing and Implementation Services for M33 Integrated Solutions, a leading logistics solutions provider. He is responsible for the successful integration of new customers into the M33 Client Network, overseeing data analysis, procurement of carrier resources through the RFQ process, and carrier contract management. He can be contacted via e-mail. |
