Trucking demand to remain sluggish into 2Q08
Analyst sees declining long-term demand for LTL, truckload
By Dave Hannon -- Purchasing, 11/9/2007 2:14:00 PM
The current overcapacity in the trucking industry that is pushing rates lower will remain well into 2008, according to a recent research note from Stephens Inc. But the long-term demand picture for trucking shows a changing industry.
Stephens analysts point out the excess capacity caused by the pre-buy associated with the 2007 engines will remain in place until the second quarter of 2008, when the trucking market will come more into balance. Continued record-high fuel prices will result in a major truckload and LTL market consolidation.
Longer-term, Stephens says overall freight demand and specifically truckload and LTL demand in the U.S. will decline due to several major economic factors. As more manufacturing moves to overseas markets, the multi-modal shipment of raw materials to and around the U.S. is declining rapidly.
“Manufacturing is 16% of the U.S. GDP, but creates 30-35% of the freight in the U.S.,” a Stephens report points out. And as more of that manufacturing transitions to services industries in the U.S. such as consulting or technology design, less freight will be required.
See also: Logistics buyers take note: LTL market is soft right now
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