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Capacity Growth An Inevitable Result of Lowered Utilization

Commercial Carrier Journal (www.ccjdigital.com) and TruckingInfo.com both recently ran stories highlighting TCP Survey data from the 4th Quarter Business Expectations Survey.

The survey showed a large majority of carriers expecting to grow capacity, and many moving to replace their aging vehicles.

The new hours-of-service rules have resulted in lower utilization of equipment. As a result, carriers are being pushed to increase capacity and raise driver pay.

The number of carriers indicating they are not going to add capacity has been trending down, and is now at its lowest level yet for the TCP survey, at just 27 percent.

Larger carriers expected to be more aggressive in adding equipment than smaller carriers. Thirty-nine percent of larger carriers expected to add between 5% to 15% compared with only 27% of smaller carriers.

“We suspect that all the 2007 pre-buy tractors are being traded out. If smaller carriers are not able to replace older, less fuel-efficient equipment (and their higher maintenance costs), those carriers will not be well positioned to benefit from looming good times,” says TCP Partner Richard Mikes.

TruckingInfo.com Article: http://www.truckinginfo.com/news/story/2014/01/capacity-growth-an-inevitable-result-of-lowered-utilization.aspx

Commercial Carrier Journal Article: http://www.ccjdigital.com/monday-money-carriers-to-add-capacity-freight-indices-mixed-union-votes/

New Fleet Investments Unlikely for Many Carriers

Recent articles from TodaysTrucking.com and TruckingInfo.com report that inadequate rates of return are keeping fleets from buying.

They share results from the second quarter TCP industry survey that show only slightly over 50 percent of carriers seeing returns on investments that can justify new equipment purchases. This figure is up just four percentage points from November 2012.

Additionally, one-third of all carriers reported having no current plans to add any new equipment. At this time, replacing aging fleets is the principle driver of most equipment investment.

“Higher equipment costs in recent years, combined with the lower utilization resulting from new HOS rules, will continue to make adequate returns on investment a challenge,” said Steven Dutro, TCP partner.

Read the complete articles here and here.

Rates of Return Still a Concern for Trucking Industry

Results from TCP’s second quarter 2013 Business Expectations Survey were highlighted in a recent article from FleetOwner.com.

Truck capacity is tightening, but many carriers are still not earning a rate of return large enough to warrant an expansion of their fleets. Stagnant cargo volumes combined with higher operating and equipment costs will likely force carriers to hold back expansion efforts for the foreseeable future.

Read the full article here.

Possibility of a Capacity Shortfall Increasing

An article from fleetowner.com reports that with rates still largely flat, much of the TL segment appears to be stalling on expanding capacity. However, a trucking capacity crunch could still be offset by capacity growth within the private fleet segment. The posting sites comments by TCP partner, Richard Mikes from his recent webinar hosted by Wall Street investment firm, Stifel Nicolaus. To read the full article, click here.

Richard Mikes Presenting Free Webinar on May 3

TCP Partner Richard Mikes will be presenting a webinar on Friday, May 3 at 11:00am EDT hosted by John Larkin, CFA – Transportation Analyst titled U.S. Truckload Fleet Status: TCP Survey 2013. 

Topics to be discussed include:

  • Discussion of the results of TCP’s latest industry wide survey of truckload management teams
  • Truckload industry supply and demand
  • Truckload pricing outlook
  • The impact that new/revised federal environmental, safety and security regulations will have on capacity
  • CSA compliance changes & costs
  • Electronic log use rates
  • New engine (2010) fleet experience
  • Time for Q&A will be allotted at the end

Dial-In Number(s)
888-267-2848 (Domestic)
973-413-6103 (International)
Passcode: 346981
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Replay
800-332-6854 (Domestic)
973-528-0005 (International)
Passcode: 346981

Questions? Contact Richard Mikes at rmikes@transportcap.com.

 

More fleets using elogs to lift CSA scores

More fleets are using electronic driver logs (elogs) to improve CSA scores, Transport Topics reports. The article highlights the results from Transport Capital Partners’ recent Business Expectations Survey that found 34.6% of carriers are using elogs on all of their trucks with an additional 68.1% either testing or using elogs on some of their trucks. TCP Partner Richard Mikes says that the federal Compliance, Safety Accountability ratings program is “one of the drivers” behind the increase in electronic log usage.

The article also discusses how elogs represent a “huge opportunity” for carriers to lower the CSA violations. Additionally, these on-board devices allow carriers to monitor speed and other measurable that help improve operations. Read the full article to learn more about the shift towards electronic logs and carriers concerns for CSA scores.

Are you the owner or executive of a trucking company who is interested in contributing to the next Business Expectations Survey? Click here to learn more.

Survey Finds Split Reaction to 2010 Engines

Transport Capital Partners’ First Quarter 2013 Business Expectations Survey found split reactions to the fuel economy and maintenance costs of 2010 engines versus 2007 engines reports FleetOwner.com. Over half of the carriers surveyed have seen fuel economy improve with 2010 engines, but 40% say that there has been no change. There was an even larger discrepancy between large carriers (over $25 million) and small carriers.

“Carriers differ in their measurement systems and tracking procedures, but the real story here is that very few carriers have seen a decline in fuel economy with the 2010 engines,” said Steven Dutro, TCP partner. “Most of the carriers we talk to have reported overall improvement in mpg in recent years from a combination of technology and training efforts.”

Read the full article.

Varied Feedback on Fuel Economy & Maintenance of 2010 Engines

A recent article by Commercial Carrier Journal discusses the varied feedback from carriers on the fuel economy and maintenance costs of 2010 engines versus 2007 engines. The feedback is from Transport Capital Partners’ First Quarter 2013 Business Expectations Survey. The survey, which launched in the summer of 2007, provides  forward-looking guidance from industry leaders through both sides of the economic cycle. Learn more about TCP’s Business Expectations Survey.

Click here to read the full article and learn more about carriers’ opinions of the 2010 engines.

Mixed Results on 2010 Engines from Truckers

There are mixed results from truckers on the new 2010 engines versus 2007 engines. TheTrucker.com shares findings from Transport Capital Partners’ first-quarter 2013 Business Expectations Survey. Over half of the carriers surveyed say that fuel economy has improved with new engines, but almost 40% report that there has been no change.

“Carriers differ in their measurement systems and tracking procedures, but the real story here is that very few carriers have seen a decline in fuel economy with the 2010 engines. Most of the carriers we talk to have reported overall improvement in miles per gallon in recent years from a combination of technology and training efforts,” states Steven Dutro, TCP Partner.

Read the full article to learn more.

Would you like to share your experiences and expectations with others in the industry? Click here is you are a trucking company executive or owner interested in participating in the next survey.

 

Mixed Reports from Carriers on 2010 Engines

Carrier feedback on 2010 engine performance is mixed according to TruckingInfo.com. Almost half of the carriers surveyed in Transport Capital Partners’ First Quarter Business Expectations Survey report improved fuel economy, but forty percent state that there has been no change. Nearly 60% of large carriers (more than $25 million in revenue) say fuel economy has improved, compared to only 32% of small carriers. “The differences in these responses may simply represent differences in measurement and tracking,” says Richard Mikes, TCP Partner. “Significantly, very few carriers report lower maintenance costs for the 2010 engines, and the majority of carriers we know say these costs have increased.” Read the full article by clicking here.