Expectations of Trucking Volumes
Image and research from truckinginfo.com.
Over 80% of trucking companies expect volumes to increase over the next year, according to the Second Quarter Business Expectations Survey, which was released on June 15 by Transport Capital Partners. The results were the third highest level ever recorded by the survey. This is good news for the industry and for truck driving jobs, as continued volume increases will end any fear of layoffs.
The optimism prevalent in the report was down slightly from the first quarter, when 90% of trucking companies believed volumes would increase in the next 12 months. The largest trucking companies were the most optimistic. About 88% of carriers who have more than $25 million dollars in revenue believe that volumes will increase. Only 71% of smaller carriers agreed.
Rate increases are also forecast for the coming year. Companies involved in trucking are generally reluctant to increase capacity until it is absolutely necessary. Given the continued weakness in the overall economy, it is doubtful that many more trucks will be joining the fleets anytime soon. The number of truck driving jobs may slowly increase, but there won’t be any sudden jumps.
Over 90% of the companies surveyed felt that rates are headed up, which is consistent with results from the first quarter. The outlook again varied based on company size; only 81% of smaller companies felt that rates will increase, compared to 93% of larger companies.
This is also the first survey since the beginning of 2009 in which none of the companies expected a decrease in rates. As volumes pickup and capacity tightens the supply and demand equilibrium is shifting to favor the industry, which will also lead to an increase in rates.
Some diversity in spot rate markets was evident during the first quarter. Type of company and region were the most important variables, but there were also some impacts from weather conditions.
Transport Capital Partners expects the rest of the year will bring even more positive news for trucking. The economy is expected to improve and GDP is forecast to grow modestly. Even if the economy were to slow down, Richard Mikes, founder of the survey and a partner at TCP, expects that rates would still increase due to how little spare capacity exists in the industry.