Truckload market approaches the turn
Carrier survey shows spot rates up, but contract rates still low
Dave Hannon -- Purchasing, 6/30/2009 2:32:09 PM
A recent survey from Transport Capital Partners found that spot prices for truckload services have ticked up in the late first and early second quarter, but contract truckload rates continue to trend well down from prior years.
According to the survey, which was reviewed on a recent conference call hosted by Stifel Nicolaus Transportation and Logistics Research Group: "Spot pricing has shown sequential improvement during the period of February through April, off a low base. This indicates that we have experienced some seasonal improvements in demand since the middle of 1Q09; however, it may be premature to suggest that year-over-year comparisons are improving."
At the same time, more than 85% of truckload carriers polled reported that contract rates declined between 5-15% in the period between February and April, despite a massive effort to reduce truckload capacity. According to the survey, 32.8% of the carriers surveyed reported selling off trucks and 35.2% reported parking trucks. And very few carriers plan on adding capacity in the near future. According to the survey, 68.0% of the respondents said they would grow their fleets 10% or less and a mere 5.7% of the carriers surveyed indicated they would grow their fleets greater than 25% in the coming year
As reported earlier today on Purchasing.com, FTR Associates forecasts a 47% decline in Class 8 truck production this year due to declining demand.
See also: Truckload overcapacity will bottom
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