Trucking market continues to go soft
Analysts, execs report declining volumes
By Dave Hannon -- Purchasing, 9/22/2008 1:43:00 PM
As the U.S. economy continues to struggle, so do trucking volumes, which means more competition anng both LTL and truckload carriers and better pricing.
Baird analyst Jon Langenfeld wrote in a note to clients that "Following a solid end to the second quarter, domestic freight trends have weakened throughout the third quarter as the 2008 peak season has failed to materialize.” Langenfeld also said some LTL carriers are reporting a continuing decline in pricing and even losing money on fuel surcharge programs in the current market.
In a recent not to clients Thomas Wadewitz of JP Morgan said falling tonnage trend in the LTL market has worsened in the recent months and is expected to persist through 2009. According to the Associated Press, Wadewitz said "A number of LTL carriers have pointed to slowing demand in (the third quarter), while pricing competition also appears to be ratcheting up further."
And comments from trucking executives confirm these trends. Earlier this month, Bill Zollars, CEO of YRC, said in a presentation "The economy has softened further, impacting both volume levels and pricing across our operating companies. After a solid second quarter, the third quarter started slowly and has progressively weakened.”
But while truckers will compete harder for business, the volatile economy trends of late could push even more trucking firms out of business. Longbow Research analyst Lee Klaskow told the AP last week that privately-held Swift Transportation Co. is likely at the most risk in the current shaky markets.
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