Transport Capital Partners’ (TCP) fourth quarter Business Expectations Survey shows carriers are stabilizing on fleet replacement, with a pre-buy unlikely and more interest in buying and selling shown by carriers. TCP uses the quarterly surveys—as well as conversations with personal contacts—to collect the insights and opinions of the nation’s transportation industry. TCP managing partners Richard Mikes and Lana Batts directed the survey and analyzed the findings, coupling the results with conversations they hold with carriers in order to present an insightful dialogue on key issues.
Fleet replacement indications over the past nine months have remained about the same, with two out of three carriers planning to replace less than 10% of their tractors in 2010. “This continues to imply a much lower replacement rate than ‘normal,’ and only one in six carriers has the urge to pre-buy,” Mikes said. Batts said, “Carriers have no interest in spending capital unless it is really necessary, implying a higher level of predictable returns are required in these ‘new normal’ times.”
Nineteen percent of respondents said they would be interested in selling their company within the next 18 months. More than one-fourth of respondents with less than $25 million in revenue would sell, while only 15% of carriers with more than $25 million would sell. TCP expects merger activity to pick up in 2010 based on a larger call-volume from potential buyers this time of the year compared with 2008. One in three carriers said they would be interested in buying, but larger-carrier interest outnumbered smaller-carrier interest by two to one. “We are seeing more interest and flexibility on the buy side at this point in time,” Mikes said.