TT 100: Carrier Execs Remain Cautious About Capacity, Expand Investments in Other Transport Modes
This story appears in the July 19 print edition of Transport Topics.
Signs of an economic turnaround have buoyed hopes for a recovery in trucking, although many fleet executives said they remain cautious about adding freight hauling capacity until rates rise enough to cover expected fuel, equipment and regulatory compliance expenses.
Carriers also continue to channel investments into rail, air and ocean transportation, and to expand use of freight brokerage service to augment more volatile trucking operations, based on interviews with industry experts and carrier executives for the 2010 edition of the Transport Topics 100 list of largest for-hire carriers in the United States and Canada.
For some carriers, the tide has already turned.
“We’re hitting equipment utilization numbers that haven’t been seen in years,” said Dave Rusch, president of CRST International in Cedar Rapids, Iowa.
While CRST is going to add 700 tractors and 1,500 trailers over the next 18 months to handle increased demand for its dry van truckload and flatbed services, other fleets are taking a go-slow approach.
“It will take consumer spending quite a while to recover,” said William Zollars, chairman of YRC Worldwide Inc., Overland Park, Kan.
Most industry observers expect freight rates to climb as demand for freight hauling increases and truck capacity tightens.
Fleets will be forced to raise pay to attract more drivers and to replace older trucks with new, more expensive models, said Charles Clowdis Jr., managing director of transportation advisory services for IHS Global Insight.
While Clowdis said he expects to see rate increases in the range of 7% to 10%, others see a more gradual upward trend as shippers lock in contracts at reduced rates with a core group of carriers.
Trucking companies in all sectors felt the brunt of recession in 2009. Revenue for carriers on the TT 100 list fell 15.7% from 2008. Flatbed and motor vehicle carriers had the steepest declines, while refrigerated carriers had the smallest drop in business.
Only one carrier on the list went out of business. That was Arrow Trucking Co., which abruptly shut down in January.
Several major carriers — including Gainey Corp. and Greatwide Logistics Services — were able to restructure debt and continue to operate under new ownership.
Vitran Corp., Toronto, and Con-way Inc. of San Mateo, Calif., both completed secondary stock sales and Roadrunner Transportation Systems, Cudahy, Wis., completed an initial public offering, the first by a trucking company since 2003.
Read more about financial and operating results in the Transport Topics 100 for-hire supplement, which is included in this edition following p. 18. (Editor’s note: The TT 100 will be posted online in the near future.)
