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TRUCKING INDUSTRY PROGNOSIS * USA - Truckers continue to cut costs, reduce capacity in down market
Waltham, MA,USA -Purchasing, by David Hannon -15 Jan 2009: -- As trucking firms continued to report demand declines in the fourth quarter, they were doing whatever it takes to reduce costs, including renegotiating their union wage contracts and reducing overall capacity wherever possible... Stifel Nicolaus analyst John Larkin in St. Louis said he expects the trucking industry to see more capacity reductions and bankruptcies over the next four months... Certainly, conventional wisdom says when demand is low, rates should come down as well. But as Purchasing reported in its December issue, buyers need to be wary of cutting too close to the bone in trucking contracts. And more recently, Wolfe Research warns that "while truck capacity has moved back in favor of shippers over the past few months, many shippers we speak with remain wary about reducing rates which could materially further reduce capacity, leading to larger rate increases when demand returns. Our sense is that contract rates are likely to remain flat to modestly up, while the spot market has recently inflected down again"...
Labels: trucking markets prognosis
posted by Unknown @ 10:20 AM
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