Trucking Analysts Warn Shippers of Impending Price Increases
Transport Capital Partners (TCP) Managing Partner Lana Batts indicates that pricing increases in the truckload sector are almost iminent this year. In an interview with Logistics Management, Batts commented that there are several areas of the country already experiencing equipment shortages. One such area, she said, is the Midwest. Lower dry van capacity in the Midwest is due to a rebounding automotive market, according to Batts.
Another factor cited by a research report from BB&T Capital Markets analyst Tom Albrecht was the Monthly Market Demand Index (MDI) from the Internet Truckstop. An MDI above 7 benefits truckers, while below 7 benefits shippers and brokers. The MDI was as low as 1.43 in February 2009 and is currently above 7 as of April 2010.
Batts commented, “….Even though carriers have contracts with shippers for mega-bid packages (not dedicated), the shipper does not guarantee traffic, and the carrier does not guarantee trucks. All they have negotiated is price.”