A national business expectations survey conducted recently by Transport Capital Partners (TCP), Nashville TN, revealed that carriers are adjusting to the new economic environment and most expect the adjustment phase to continue through 2009, according to TCP information.
“This is further evidence that the tightening of credit, documented in our survey of major industry capital suppliers, is reverberating throughout carrier planning sessions this season and truck manufacturing forecasts at the majors and their suppliers are being based on similar premises,” stated Richard Mikes, TCP Managing Partner.
Transport Capital Partners' survey response regarding the freight environment was tempered toward the downside, with 33.8 percent of respondents expecting business volumes to decrease. Only 16.5 percent expect an increase in 2009 compared to 2008. Of the responding carriers, 37.7 percent thought volumes would remain the same.
“Recent discussions with carriers reveal a belief that a number will go out of business by next spring, thus reducing capacity in the industry and improving conditions for the survivors,” stated Steven Dutro, another TCP partner.
A majority of respondents (54 percent) expect credit availability to tighten in 2009 compared to 2008. A small group (11 percent) thought it could improve, with 23.6 percent expecting it to remain the same. This is also a reflection of opinions expressed to TCP partners in recent conversations with lenders supporting the industry.
Projected equipment purchasing plans are low: Two-thirds of the carriers who responded are expecting to replace under 20 percent of their tractors in 2009, while 17.3 percent plan to replace 20 - 40 percent and only 9.4 percent indicated plans to pre-buy in anticipation of 2010 engine standards.
Rate increases will remain about the same in 2009, according to 55 percent of the carriers. Another 12.5 percent anticipate an improvement and 20 percent forecast a decrease.
The majority of respondents expect fuel surcharges to cover 80 to 95 percent of increased fuel costs, while about 20 percent expect them to cover about 95 percent or more. About the same number felt less than 80 percent of the costs would be covered.
Respondents reported fleet sizes spread across five revenue categories, from under $10 million to over $100 million. Approximately half the carriers chose “general carrier-diversified with no long-term contracts” to describe their company and 20.4 percent chose “core-carrier--primary position out of specific origins.” Forty-five percent of respondents reported their companies as van carriers, 21 percent as reefers, and 10.2 percent as flats.