By Daniel P. Bearth, Senior Features Writer
This story appears in the July 18 print edition of Transport Topics.
Rising demand for freight hauling is generating more business for trucking companies, but rising costs and a dwindling supply of drivers are making it difficult for the nation’s top for-hire carriers to provide additional capacity to meet that demand.
While many carriers on Transport Topics’ 2011 Top 100 For-Hire Carriers list are stepping up purchases of new trucks and trailers, very few are growing the size of their fleet.
“No fleet is aggressively increasing [its] size,” said Stephen Russell, chairman of Celadon Group.
Executives say they are reluctant to commit to additional capacity until profit margins increase enough to cover the rising cost of equipment and other expenses, including a jump in driver pay and greater outlays for recruiting and training drivers.
“We have made several changes in the way we run our business,” said Stephen O’Kane, president of A. Duie Pyle Inc.
“First, we are training employees from our docks and our warehouses to become professional truck drivers. Secondly, the driver shortage has caused us to alter our pricing strategies.”
Uncertainty over driver wages now makes long-term price commitments “dangerous,” O’Kane said.
Derek Leathers, president of Werner Enterprise, said companies are no longer able to expand capacity by simply adding trucks.
“The current economic environment will not support such a move,” he said. “The cost of new equipment is higher than ever before, and financing is a huge obstacle facing many companies today.”
A survey of carrier executives also finds concern about possible changes in hours-of-service rules. A reduction in the maximum time a driver can drive legally to 10 hours from 11, for example, would force many carriers to alter delivery schedules and require more equipment.
To read more about how conditions are changing the way for-hire carriers do business and for a look back at the Top 100 carriers in 1980 and where they are now, see the Transport Topics Top 100, inserted after page 18.
Click here to download the 2011 Transport Topics 100 listing of U.S. and Canadian for-hire fleets.
