Carrier Executives Predict Freight Capacity Will Tighten

Michael White, North American president of Maersk Line, Norfolk, VA recently predicted that in the private sector, the shortage of international cargo containers that developed early in 2010 will repeat itself when freight demand grows and strains the ocean shipping industry’s equipment capacity. Those shortages were created after manufacturers cut their building capacity to near zero, he said, because loss-plagued carriers couldn’t afford to buy equipment during the recession. After 2009, White said, “carriers have made the very difficult but necessary decision to match capacity with demand” and curtailed the habit of creating overcapacity through equipment purchases.

The same is true for over-the-road trucking. Christopher Lofgren, CEO of truckload carrier Schneider National, Inc., Green Bay, WI, sketched a parallel example for truckers, who have managed their capacity as demand fell.

These views were echoed by shipper officials who spoke for the National Industrial Transportation League trade group, which hosted the event in conjunction with the Intermodal Association of North America. “Trucking (capacity) is a major concern from many, many aspects,” said Terry Bunch, chairman of NITL and director of logistics and customer service for Rayonier, Inc., a forest products company based in Florida. He cited driver supply, the CSA program, and the expected changes in federal hours-of-service laws for drivers. Other shippers voiced similar concerns about tightened freight capacity.

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