TCP Survey shows carriers see upward volumes, rates this year
The Transport Capital Partners (TCP) first quarter 2012 Business Expectations Survey found that carriers continue to be optimistic for the year ahead with 77% of those surveyed expecting volumes to increase in the year ahead, and only 2.6% expecting volumes to decrease.
Larger carriers are much more optimistic this quarter by a factor of almost 25%. “As the economy recovers with increasing consumer confidence buoying retail growth the first quarter, carriers are seeing earlier volumes and tight capacity boding well for the next year ,” says Richard Mikes, TCP partner.
Carriers showed a very similar outlook for freight rate increases: 77% of carriers expect volumes to increase and only 1% expect volumes to decrease. “Cost pressure, including driver scarcity, will likely keep carriers well aware of the need to maintain margins to afford new replacement trucks as they look ahead to lowered truck utilization with new hours of service regulations in mid 2013,” says Lana Batts, TCP partner.
Despite this optimism however, the expectations for rate increases is higher than actual freight rate increases over the last three months. Only 45% of carriers have seen rate increases in the last three months, compared to 50% in November of 2011, and nearly 60% in August of 2011. “The diversity of rate increases among types of carriers and the normal seasonality expectations may be playing out early-on in the first quarter,” Mikes says. “The focus of most carriers may have been to keep trucks busy to keep drivers on the payroll and to ensure that volumes did not dip.”
The news of the fleet shrinking in 2011 and recent indications of rising volumes are contributing to the optimistic outlook of carriers, according to Batts and Mikes. If volumes follow the same pattern as 2011, the possibility of a generally upwards rate trend over the coming year with a rate spike in early summer seems likely.