If we were to select one sector of transportation that went through the toughest economic situation within the last calendar year, we definitely select Less Than Truckload Carriers (LTL carriers). With top Freight Companies such as Fed Ex Freight and Con-Way laying off workers in addition to posting losses, at this time there is no doubt Less Than Truckload Carriers have struggled.
Challenged by large fixed-costs on one hand and freight capacity plummeting almost 30%, we foresee a really difficult path ahead for the Ltl carrier industry. One of the problems is over capacity and empty trucks, despite freight quotes falling and cheap freight starting to be commonly available. Many experts happen to be concerned what could take place once government stimulus money injections cease and the actual supply chain demand from logistics companies, freight brokers, and shippers is left to a much more normal, un-subsidized level.
The actual question uncovers quite simply to lower freight quotes to find freight for empty trucks, or to continue to run trucks with empty space. All Stakeholders in the Freight Industry: Shippers, Freight Brokers (Logistics Professionals), Owner Operators and Carriers alike are inclined to agree with the fact that Less than truckload quotes tend to be going up.
Freight Executives from Pitt Ohio Express have stated there is simply no point in looking to expand frontiers when you do not have the freight load capacity in order to fulfill demand. Analysts disagree that raising freight load volume, increased tonnage, and better LTL carrier discipline are all creating a better outlook for the growth of the Less Than Truckload segment.
On the other hand, various other analysts consider that the likelihood of losing some carriers over capacity will not become a significant concern. "Most carriers have been running lean for the past 36 months." said Brad Hollister of Freight Access, Inc. "We have heard of the troubles of some of the larger carriers for sometime, but it appears that bond holders are not willing to cut their losses quite yet and are being patient in monitoring performance. This may have to do largely because of the state of the overall economy. Not only is there a lack of other investment opportunities, but there is virtually no market for liquidating assets, particularly in the used truck market."
Presently, it seems the LTL Carriers in the freight industry have definitely made it through a very difficult period. "Most companies are lean right now and virtually all are announcing better than expected results, which will continue to strengthen the sector going forward." said Hollister. Brad Hollister went on to say "The question remains who fast will rates continue to raise going forward as demand increases. It is the age-old question of raising rates sharply to capture profits or more moderately in order to regain market share. It appears that every carrier has a different philosophy so it will prove to be a marketplace filled with opportunities over the upcoming months."
Full Story Here>. Full Story here: http://blog.freightaccess.com/?p=137
Less than Truckload Carriers Applaud the Exit of Cheap Freight as Capacity Tightens
If we were to choose a single segment of transportation which went through the worst financial situation during the last twelve months, we must pick Less Than Truckload Carriers (LTL carriers). With top Carriers such as Fed Ex Freight and Con-Way laying off personnel in addition to reporting losses, there is no question Less Than Truckload Carriers have struggled.
Challenged by high fixed-costs on one hand and transportation demand dropping virtually 30%, many of us expect to have a tough path ahead with regard to the Less than truckload carrier industry. One of the problems is over capacity and empty trucks, even with freight quotes falling and cheap freight becoming commonly available. Many experts happen to be concerned just what will take place once government stimulus capital injections cease and the supply chain demand from logistics companies, freight brokers, and shippers is left to a much more natural, un-subsidized level.
The question turns up quite simply to lower freight quotes to find freight for empty trucks, or to continue to run trucks with empty space. All Stakeholders in the Freight Industry: Shippers, Freight Brokers (Logistics Professionals), Owner Operators and Carriers similarly are inclined to agree that Less than truckload rates are increasing.
Freight Executives from Pitt Ohio Express have now acknowledged right now there is simply no point in seeking to expand frontiers if you do not have the freight load capacity to fulfill demand. Analysts content that boosting freight load volume, increased tonnage, and better LTL carrier discipline are all creating a better outlook for the growth of the Less Than Truckload segment.
On the other hand, some other analysts take into consideration that the likelihood of shedding a number of carriers over capacity will not become a major concern. "Most carriers have been running lean for the past 36 months." said Brad Hollister of Freight Access, Inc. "We have heard of the troubles of some of the larger carriers for sometime, but it appears that bond holders are not willing to cut their losses quite yet and are being patient in monitoring performance. This may have to do largely because of the state of the overall economy. Not only is there a lack of other investment opportunities, but there is virtually no market for liquidating assets, particularly in the used truck market."
At the moment, it seems the LTL Carriers in the industry have certainly made it through a demanding time. "Most companies are lean right now and virtually all are announcing better than expected results, which will continue to strengthen the sector going forward." said Hollister. Brad Hollister went on to say "The question remains who fast will rates continue to raise going forward as demand increases. It is the age-old question of raising rates sharply to capture profits or more moderately in order to regain market share. It appears that every carrier has a different philosophy so it will prove to be a marketplace filled with opportunities over the upcoming months."
Full Story Here>. Full Story here: http://blog.freightaccess.com/?p=137
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