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Trucking Update * USA - Buyers see light at the end of the tunnel
Shippers finally get relief as carriers report lower demand and expanded capacity for LTL and truckloadNewton,MA,USA -Purchasing.com, by David Hannon -April 5, 2007: -- After seeing unprecedented demand and pricing for their services in the recent past, trucking firms are reporting a decrease in demand in early 2007, which is good news for shippers and freight buyers looking for more capacity and an end to high rates... According to a recent Bear Stearns survey, 80% of shippers polled reported overcapacity in truckload in the fourth quarter, up dramatically from 54% in the third quarter. In the same poll, 71% of shippers reported overcapacity in the LTL market in the fourth quarter. And 51% of shippers polled expect more truckload capacity to come online in the next 12 months... Finally, some light at the end of the tunnel... But what accounts for such a dramatic flip-flop of market dynamics and more importantly, how long will it continue? Trucking firms did a lot of equipment "pre-buying" in the second half of 2006 to beat the EPA regulations that went into effect in 2007 governing truck engines and fuel. The result has been a rapid increase in trucking capacity that met with an unexpected decline in demand for trucking late 2006... Wayne E. Johnson, director of logistics at American Gypsum Co. and chair of NITL's Highway Committee explains that, since pricing in both the LTL and truckload segments has slipped, shippers today are reviewing the competitiveness of their carrier base more so than in the recent past... And every carrier contacted by Purchasing reported that shippers and freight buyers today are increasing the amount of information they request from their current and potential carriers... Saia now shares more of its costing data with customers. If delivery to certain locations takes significantly longer than others, shippers and carriers can now work more collaboratively to reduce time and costs which benefits both parties...
Labels: trucking policys
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