Analyst predicts “freight pricing renaissance”

Are trucking rates at rock bottom?

By Dave Hannon -- Purchasing, 6/13/2008 12:38:00 PM

Freight buyers take note: Analyst Jon Langenfeld of Robert W. Baird  predicted a “freight pricing renaissance” next year and says the rash of bankruptcies caused by dramatic fuel price increases is already tightening up the truckload and LTL markets.

Langenfeld this week followed up his previous remarks at the NASSTRAC conference with a note to clients that says, “When the domestic freight environment does rebound, the trucking industry is positioned to garner significant and sustained rate increases, given the meaningful exodus of capacity and inflationary cost environment.”

According to a Reuters report, Langenfeld says LTL pricing is firming and truckload rates are improving as more truckers disappear from the market. "We recommend investors obtain exposure to the domestic freight environment ahead of what we believe will be a freight pricing renaissance once the economy improves."

But Ed Wolfe of Wolfe Research, says the market is tightening, but pricing has not yet been impacted. “We continue to sense that TL and LTL pricing has bottomed but remains weak. We are monitoring closely whether modestly improved demand and gradually decreasing truck supply through consolidation will lead to real pricing gains or whether new tractor supply driven by the replacement and pre-buy cycles will offset it over the next 6-12 months,” Wolfe said in a note to clients.

What do you think? Is the trucking market tightening up? Have rates bottomed? Use the POST A COMMENT tool on this page to provide your thoughts.