Briefs
Staff -- Purchasing, 5/5/2005
- Shippers expect truckload capacity to remain tight, while LTL capacity will tighten further in the coming year according to a recent survey from Bear Stearns. The survey found 70% of shippers expect truckload capacity to tighten further throughout 2005 while 31% of respondents expect LTL capacity to tighten this year. Truckload rates are expected to increase 3.3% this year, according to survey respondents, while LTL rates will climb 2.6%. The survey concludes that more shippers are looking to smaller carriers for capacity in this environment. More than half of those shippers polled in the survey say smaller carriers have more capacity right now and secondly larger carriers focus more on accessorial charges during times of tight capacity. The Bear Stearns survey also found that rail service levels are dropping during times of increased demand.
- FedEx Freight is opening four new service centers and expanding a fifth facility as part of its nationwide expansion to meet growing demand. "We are expanding our infrastructure needs considerably to accommodate the growth, which is not just economic growth but market share growth too," FedEx Freight President and CEO Douglas Duncan said in an interview recently at FedEx's Memphis headquarters.
- The American Trucking Associations' advanced seasonally adjusted for-hire Truck Tonnage Index decreased 2.2% in February. This followed a revised improvement of 5% in January, which was the largest month-to-month increase in several years. Compared to February 2004, the index was 3.9% higher. Year-to-date, through February, compared to the same period in 2004, the index was up 6%. "February's decrease, while quite large in historical terms, needs to be tempered with January's extremely strong gain," said ATA Chief Economist Bob Costello. "Often, after we see a big change during one month, it is moderated the next month, which I believe happened this January and February. And, while one month does not make a trend, we are expecting the rate of growth in truck tonnage to decelerate compared to 2004. Nevertheless, we still expect tonnage to grow solidly in 2005. February may be the beginning of this deceleration trend," he said.
- Canadian National Railway and Norfolk Southern Railway have agreed to a new routing protocol aimed at streamlining the exchange of rail traffic at major gateways. Under the agreement, which will be implemented over the next three months, CN and Norfolk plan to direct rail traffic through the most efficient interchange locations to improve network capacity and transit times. Traffic between the Louisiana Gulf and the U.S. Northeast will be interchanged at New Orleans or Memphis, benefiting from a more direct route and less intermediate handling, the companies said. Western Canadian traffic to and from the south-central United States will be interchanged at Memphis, avoiding congestion and additional handling in Chicago.
- Long-haul driver turnover surged to a record high in the fourth quarter of last year, American Trucking Associations reported. ATA's Economics Group said in its Trucking Activity Report that both small and large truckload carriers saw their turnover rates rise to record highs, with large companies reaching an annualized 136% rate and smaller ones reaching 102%. And with a driver shortage in the long-haul market continuing, it is unlikely the rates will improve anytime soon, ATA said.
- Roadway Express announced today the expansion of its heavyweight airfreight service to include northbound service from the U.S. to Canada. Shippers in the U.S. can select next-day, 2nd-day or 3rd-day door-to-door or door-to-airport delivery service throughout Canada. Customers have the option of specifying their own customs broker or brokerage services can be provided to perform the clearance on the consignee's behalf.
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