Transport Topics 100: Freight Hauling Capacity Loss Seen Setting Stage for ‘Bull Market’ Recovery After Recession Ends
This story appears in the July 13 print edition of Transport Topics.
A steep and prolonged economic downturn forced many for-hire carriers to cut hauling capacity, but the stage may also be set for what one analyst called “the mother of all bull freight markets.”
Carriers with little or no debt that can offer a range of services will most likely survive and prosper when demand returns, ac-cording to experts and executives interviewed for the 2009 edition of the Transport Topics 100 list of the largest for-hire carriers in the United States and Canada.
A Transport Topics analysis of the Top 100 documented the capacity cutback: the number of company tractors remained flat for 2008, and tractors provided by owner-operators fell 6.9% from 2007.
Like many executives, Rollie Anderson, president of Anderson Trucking Service, St. Cloud, Minn., said he has put the brakes on spending to conserve cash now.
“We are limiting capital expenditures,” he said. “We feel that when this recession is over, with the inevitable loss of carrier capacity, ATS will find itself in a stronger, more viable position in the transportation industry.”
Other trends are also limiting capacity expansion.
Analyst John Larkin of Stifel, Nicolaus & Co. said more stringent safety regulations and difficulties in recruiting enough people to replace older drivers will limit the ability of motor carriers to expand.
While the recession hit hard, some suffered more than others.
Household goods carriers saw revenue plummet as home purchasing dried up.
Vehicle haulers saw volumes decline as manufacturers slashed production of cars and trucks.
Even traditionally strong sectors, such as package and contract/logistics, felt the effects.
For various reasons, refrigerated and flatbed carriers did far better in 2008 than truckload and less-than-truckload carriers. Refrigerated fleets handle food and beverages that are more stable in a recession, while flatbed carriers benefited from demand for oil field hauling.
Read more about these and other developments in the Transport Topics Top 100 For-Hire Carriers section, which is included in this edition after p. 16.
Editor’s Note: The 2009 Transport Topics 100 listing of for-hire carriers will be posted online at a later date.
