ground breakers
Analyst: Predicted TL space
shortage yet to materialize
FedEx Freight Canada has opened a service center in
Calgary, Alberta. The new center handles FedEx Freight
shipments throughout Western Canada. … CaroTrans, a
global non-vessel operating common carrier and ocean
freight consolidator, has opened a new office in Seattle. …
Ryder has made enhancements to its food packaging and
distribution center in Beaver Dam, Wis. …
Acklands-Grainger Inc., Canada’s largest distributor of industrial, safety, and fastener products, has opened a 102,000-square-foot
warehouse in Saskatoon, Saskatchewan. … Terminal operator Global Container Terminals Inc. unveiled final plans for
a multimillion-dollar expansion project to develop a 70-acre
container terminal on the Bayonne, N.J., waterfront.
In mid-January, DAT TransCore, a Portland, Ore.-based consultancy that tracks demand, capacity, and
pricing on 15,000 truck lanes in the United States and
Canada, forecast a near 6-percent rise in contract rates
over 2011 levels for dry van, flatbed, and refrigerated
transportation. It also projected a 7.4-percent increase
in “spot,” or non-contract, rates for the same livery.
At the time, however, it issued a caveat that full-year projections made in mid-January should be
taken with a grain of salt.
Four months later, there appears to be more than a
grain of salt in TransCore’s shaker. While second-quarter freight demand remains solid—unusually so, since it
normally peaks in the third quarter—there appear to be
“plenty of available trucks” on the road, the consultancy said.
The supply-demand equilibrium has kept a lid on rate
increases so far. Mark Montague, TransCore’s pricing guru,
said the rate hikes TransCore projected “will happen; we’re
just not sure exactly when.”
Montague wrote in a blog that a hardly-robust economy,
THE LEADER
in Battery Handling Solutions!
available alternate capacity from rail intermodal, a mild
winter and spring that kept roads open, and declining fuel
prices that allowed more operators to stay on the road
instead of parking their vehicles or going out of business,
have combined to keep capacity abundant at least mid-way
through the quarter.
TransCore’s load-to-truck ratio for dry vans—the most
common form of livery—is at around 3.0, a level considered neutral on the supply-demand scale and which would
imply ample availability of equipment, Montague wrote.
In a follow-up e-mail, Montague said he’s “not as optimistic” now as he was in January about carriers achieving
robust pricing levels. “There are definitely mixed signals
out there, but given inflation in trucking costs, the fact
remains that rates are about where they were one year ago,
which means a net loss to truckers,” he said.
Montague said June “could still be the strong month that
makes the quarter.” Nonetheless, his data indicate no evident rate pressures except in the refrigerated sector, which
for that category is normal for this time of year.
mtcworldwide.com
We Provide Solutions.
ENGINEERS / DESIGNERS / MANUFAC TURERS
An Employee Owned Company
SIGNS OF WEAKNESS
With supply and demand in balance, it may not be surprising
that market conditions are turning a bit against truckload
carriers. Morgan Stanley & Co.’s Truckload Freight Index has
demonstrated signs of weakness in recent weeks, according to
William Greene, the firm’s leading transport analyst.
Greene added in a research note that in visits to Swift
Transportation Co. and Knight Transportation, two of the
country’s largest truckload carriers, managers were “notably
reluctant to discuss recent market trends or [to] counter
concerns of moderating [truckload] fundamentals.”
Executives at Swift and Knight affirmed the industry’s
guidance of a 3- to 4-percent growth rate, Greene said.
However, barring a significant structural change in how the
industry does business, carriers’ pricing initiatives will do
little more than offset the impact of cost inflation, he said.;
—M.S.
