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OPINION * USA - First signs of upturn in the US logistics market?
There is no doubt that the market environment in the US logistics sector is tough
USA -Road Freight/Transport Intelligence (UK), by John Manners-Bell -25 July 2008: -- ... Many small and medium truckers are suffering, with a substantial number either going out of business or approaching their bigger rivals to be bought-out. Many of the bigger players are also finding it challenging, with Arkansas Best Corporation reporting a 7% drop in profits. YRC Worldwide, reporting yesterday, also announced a fall in revenue and a loss over the first half of the year. However this is only part of the story... There are some pockets of good news in the market. Con-way, for example, has just reported strong figures for both its less than trailer load and full truck load business. Its operational income increased 7.2% to $77.4m for the second quarter compared to the same period 2007 and revenue climbed 10.6%. Yield is improving even after fuel surcharge, as is capacity utilisation which is running at over 90%. Its newly created full truck load business is also in profit. Intermodal and non-asset based operators such as Hub Group and CH Robinson have also announced positive results, with both companies seeing profits up 9% over the quarter (Ti Logistics Briefing, News, July 22)... There are now signs that the balance within the market is starting to change. Demand may have fallen, but so has capacity. There are not as many trucks on the road, yet key areas of the economy are still growing, such as the coal and the agri-bulk sector which continue to drive profits. US export traffic is also strong. This means that in a number of areas capacity has tightened. As Douglas Stotlar, the CEO of Con-Way commented "The trend of capacity leaving the market is improving the supply/demand balance which is benefiting Con-way Truckload"... There is no doubt that the industry seems to be consolidating around larger, stronger players...Labels: freight markets
posted by Unknown @ 12:22 PM
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