Recently, the Stifel, Nicolaus & Company released their Transportation and Logistics Outlook for 2011 and Beyond, acknowledging the current positive and negative occurrences affecting the trucking industry as well as predicted what they believed to be major changes to come.
The firm pointed out several blows to the trucking industry, from the economic recovery to tonnage and capacity issues.
The economy is not progressing as well as predicted, with the unemployment rate hitting 9.1% with those who are employed receiving little pay raises, affecting retail spending which has also slowed. In return, manufacturing has decreased as well, with its growth in the month of August hitting the lowest it has been in two years (http://www.huffingtonpost.com/2011/09/01/us-manufacturing-growth-august_n_945203.html).
With manufacturing slowing down, the trucking industry, among other transportation industries, has been seeing a leveling out in regards to its LTL tonnage. Trucking capacity, which has decreased by 20% during the recession, continues to worsen with new and pending regulations, such as the hours of service proposal which would limit a driver’s time from 11 to 10 hours and is predicted to decrease capacity by an additional 3-6% (http://www.truckinginfo.com/news/news-detail.asp?news_id=74671).
But it’s not all bad news for the trucking industry. With capacity issues and stricter regulations, LTL rates have increased between 4.5% and 6.9% with truckload rates expected to increase 10% by 2013, according to truckinginfo.com. And they are not alone. Rail and intermodal prices are continuing to grow as well.
With upcoming regulations and stricter safety measures, the research firm predicts rates to continue to increase and capacity to shorten regardless of upcoming elections.
Unsure of where the price of fuel will go, the price of oil is expected to increase. Higher fuel prices are another source leading to capacity issues as many companies cannot afford the high diesel costs.
Finally, the Stifel, Nicolaus & Company forecasts a greater reliance on 3PLs to move freight in order to beat the rates of in-house trucking companies. Along with cheaper prices believed to be obtained when shipping with a broker comes not knowing who is handling your freight or whether that trucking company is credible. In other words, you are betting thousands, even millions of dollars worth the stolen/damaged goods by shipping with an unqualified trucking company just to get a cheaper rate. Is it worth the risk?
When shipping your LTL and truckload freight with Road Scholar Transport, you can rest assured that your freight is being constantly monitored and transported by a qualified carrier, offering 24-hour expedited shipping to ensure that your freight is delivered on time…every time.
If you want to stay up all night worrying about your freight, then that’s THEIR business. BUT, if you want to sleep all night, that’s OUR business.
What is your outlook for the trucking industry? List your comments below!