Analyst: Short-Haul Will Boost LTLs

RANCHO MIRAGE, Calif. — The growth of electronic commerce coupled with historically low inventory levels and an expected rise in short-haul business should enable less-than-truckload carriers to grow faster than other freight transportation segments through 2002, according to an economic analyst.

That growth is far from certain, though, said Martin Labbe, president of Martin Labbe Associates, an industry research firm. He told members of the Distribution and LTL Carriers Association at their annual conference that progress could come with a heavy price tag, in the form of higher costs, new competition and perhaps lost productivity as a result of expected changes in the hours-of-service regulations.

The message to company executives from Labbe was similar to one they heard at their 1999 summer meeting. The greatest effect of e-commerce will be increased freight movement for local and regional businesses. As a result, regional LTL carriers, as a group, can expect average annual growth of 2.6% through 2002, the transportation consultant said.

However, there could be several roadblocks in the way. Raises in drivers wages, fuel costs and insurance premiums will hit LTL carriers as they will all trucking freight modes. Several insurance companies have increased their rates and fuel could climb about 12% this year, said Labbe, whose firm is based in Ormond Beach, Fla.

For the full story, see the Jan. 31 print edition of Transport Topics. Subscribe today.