newsworthy
Weak Q1 results
lending to small truckers picks up
In a sign of growing confidence in the U.S. economic and freight recovery, banks
have upped their lending to smaller trucking companies for the first time in
nearly three years, according to a firm that tracks lending activity across six
industries, including transportation.
Skokie, Ill.-based PayNet reports that in the first quarter of 2010, the dollar
value of new loans consummated with trucking companies that have never
owed more than $10 million rose 6 percent over first-quarter 2009 levels. The
first-quarter results represent the first year-over-year increase in dollar-based
truck lending activity in 11 quarters, according to Thomas Ware, senior vice president of PayNet.
Ware said the firm does not keep empirical data on loan origination activity.
However, he says that anecdotal evidence leads him to believe that the pace of
originations has picked up as well.
Another encouraging sign, Ware said, is the sequential improvement in lending action in the trucking segment. In the third quarter of 2009, the value of
loans to truckers was down 28 percent from the third quarter of 2008, when the
financial crisis hit. The decline in the fourth quarter of 2009, however, narrowed
to 8 percent from the fourth quarter of 2008.
The first-quarter results build on these positive trends, Ware said, and bode
well both for the second quarter and for the rest of the year. Ware declined to
be more specific about second-quarter loan activity, saying the firm doesn’t yet
have enough data to make a solid call.
The trucking industry in general—and smaller truckers in particular—has one
of the highest loan default rates of any U.S. industry. However, Ware said PayNet
projects that default rates among the industries it tracks will be one-third lower
in 2010 than they were in 2009. He added that March 2010 data showed the
biggest sequential drop in delinquency rates since the firm began keeping data
in the 1990s.
Unlike other equipment types, truck power units are not purchased for future
use. Instead, they are acquired to meet an immediate and evident need, namely the movement of goods. The elevated lending activity, especially among trucking firms that don’t have capital to waste, reflects growing optimism in the economic and freight outlooks, according to Ware.
—M.S.
Averitt Express launches intermodal service
Less-than-truckload carrier Averitt Express has launched intermodal operations in partnership with five major U.S. railroads.
Cookeville, Tenn.-based Averitt said it is working in the Western United
States with BNSF Railway and Union Pacific, in the East and Midwest with
Norfolk Southern Corp. and CSX Transportation, and in Georgia and
Florida with Florida East Coast Railway.
Averitt will rely on its own 53-foot trailers and use 53-foot containers controlled by its rail partners, the trucker said.
In October, DC VELOCITY reported that Averitt was in talks with railroads
regarding possible intermodal partnerships.
