Thursday, August 21, 2014

Truckers Tight

Truckload capacity falling behind demand, fueling shortages and price hikes.

You know how it seems there’s never a longhaul trucker around when you need one?

It’s not just your imagination. Truckload capacity has never fully recovered from the recession, and as economic activity continues to increase, the rise in demand is causing shortages in trailer availability, indicating upward pressure on truckload rates.

Available tractor capacity at the $10 billion group of large truckload carriers tracked by the Journal of Commerce Truckload Capacity index remains more than 18 percent below its pre-recession peak in the fourth quarter of 2006. ACT Research projects retail sales of 222,000 heavy trucks in 2014, with about 190,000 new tractors replacing older trucks and the additional 32,000 tractors representing fleet expansion. The carriers are apparently maintaining current capacity levels mostly by replacing older trucks, and only adding new trucks incrementally as business allows.

So what will provide the funds to replace aging equipment and expand their fleets? Higher rates. The Cass Truckload Linehaul Index, which measures transportation pricing, rose 5.6 percent year-over-year in the second quarter of 2014.

Of course, those trucks don’t move down the road or pick up a load without drivers, and the ongoing shortage of truck drivers is also contributing to keeping the market tight.

Kirk Shearer
800-989-0054 x103

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