The first-quarter Transport Capital Partners (TCP) survey sees optimism pervading trucker expectations for rates and volumes. Optimism for volume growth has risen steadily over the last six TCP Surveys.
Reflecting a better outlook for the economy at large, coupled with counter seasonal capacity shortages, more and more carriers expect volume increases over the next 12 months. Volume expectations grew 74% from 4th quarter 2013--44% to 77%. Looking back at this time last year, the increase is an impressive 48%.
“The literal mother of all rate increases may be here in 2014, as reflected in our first quarter survey,” says Richard Mikes, survey leader and TCP partner.
Rate expectations have moved almost in tandem with volume expectations. Four out of five carriers expect rates to increase over the next 12 months, a 62% increase over last quarter.
“Historically, smaller carriers have been more optimistic about rate increases,” says TCP Partner Steven Dutro.
Almost 60% of carriers in this survey indicated their Daily Sales Outstanding (DSO) had not increased. “We expect that as capacity tightens, DSO will continue to reduce,” Mikes says.
TCP notes that spot market rates surged over the last two months (as most annual and longer term contracts were negotiated). The first and second quarter will likely see mid-single digit increases rather than the low single digit growth earlier sentiment by carriers of low single digits based on carrier comments.