Capacity, carriers continue to disappear in trucking freight slump
Report shows 480 carriers went out of business in first quarter
By David Hannon -- Purchasing, 6/18/2009 2:00:00 AM
According to a quarterly report from market analyst Donald Broughton at Avondale Partners, 480 trucking companies in the U.S. went out of business in the first quarter of this year. That's roughly 1% of the capacity exiting the market in a three-month period.
But despite the dramatic demise in the carrier base, Broughton says the capacity exiting the market is still not so much that it would tighten supply enough that it will impact trucking rates or prices. As reported by the Associated Press, Broughton estimates that more than 5% of the current trucking capacity would have to exit the market before capacity would match up with demand and prices would stabilize.
And it's not just smaller trucking firms that are under extreme financial pressure. Industry giant YRC reported lower-than-expected earnings for the first quarter, including charges from its integration efforts. Those integration efforts have some customers worried about service levels, according to some experts. Longbow Research analyst Lee Klaskow says "there remains a real risk of further customer defection," for YRC.
Rick O'Dell, president and CEO of LTL carrier Saia, said recently: "We are operating during extremely difficult economic times with weak tonnage demand and increasingly competitive pricing which continues to pressure margins."
"The freight markets continued to suffer from excess capacity and intense price competition," said Douglas Stotlar, president and CEO of logistics firm Con-way.
Trucking bankruptcies continue
04/27/2009YRC reportedly seeks $1B in bailout money
05/15/2009Trucking market continues to go soft
09/21/2008Truckers see signs of uptick in demand
08/06/2008
Now Playing: 