Trucking Capacity Remains a Top Concern For Shippers
If you are a shipper, you have probably heard the phrase”Tight Capacity” over and over for the last several years. Those of us in the truckload transportation industry have been bracing ourselvers for the hard crunch that we all know is coming with regard to capacity. Trucking industry analysts are reporting a so-called “Equilibrium” in mid-2012, a precarious balance between truck supply and freight demand. The unsettling news is, trucking demand in the U.S. is increasing, even as economic growth slows. Truckload carriers, instead of adding to their fleets in anticipation of higher demand, are reserving capacity for their most profitable freight.
Several factors affecting capacity include the limited availability of qualified drivers as well as the high cost of new and used trucks. According to Derek Leathers, persident of the $2 billion trucking company, Werner Enterprises, “All the data seems to indicate that 19 to 20 percent of all truckload capacity that existed in 2007 has exited the market…that means one in five trucks is gone. I don’t believe that number is going to change.” A quarterly survey of tractor counts at a $10 billion group of truckload carriers , including Werner, shows that their combined capacity dropped 0.6 percent from a year earlier in the first quarter and only 0.3 precent from the fourth quarter, the smallest annual and sequential decline in their tractor counts in a year and a sign of equilibrium. The carriers in that group, however, reduced capacity 15.6 percent from 2006 through 2011, cutting 8,000 trucks from their tractor pools.
According to David Schrader, senior vice president at TransCore, a 17% surge in the TransCore Dat North American Freight Index in April could indicate that shippers are close to seeing the limits of capacity at large truckload fleets. “Freight flows to the spot market when shippers hit tight capacity,” Schrader said in an interview, “What we’ve seen so far in 2012 is some of the heaviest freight volumes we’ve ever seen” on DAT’s spot market load boards.
So how do shippers anticipate and circumvent the inevitable capacity crunch? One way is to work closely with your Transportation Service Providers. All America Transportation has forged tight relationships with thousands of owner-operators and small to medium-size carriers. These are the truckers that “fly under the radar” of most shippers. They usually work extremely long hours and have little time to market themselves to shippers. so they rely on non-asset based companies such as ours to keep their trucks moving and take care of the load details for them, such as scheduling appointments and providing routing.
Give us a call or send an email to schedule your one-on-one time with one of our knowlegeable staff. We will focus on not only cost-saving measures, but can match your freight to some of the greatest truckers in the business.