Trucking Companies Read to Add Capacity
The Transport Capital Partners recently conducted a new study surveying truck drivers in order to gain knowledge as to whether or not the capacity of trucks will increase. 25 percent of the truckload carriers are expecting the capacity of their load to increase by anywhere from six to ten percent over the next twelve months. This is compared to a 7 percent increase one year ago. However, according to the survey, 65 percent of trucking executives either do not plan to add capacity or plan on barely adding any capacity at all. In November 73 percent of trucking executives replied with this answer. This is down almost eight percent, meaning most trucking executives expect to increase capacity, meaning there would also be a likely increase in truck driving jobs.
In 2011 capacity of truckloads continued to go down. The Journal of Commerce tracked a sample group of six large carriers. They found that they cut the tractor count down by 1.1 percent. However, large carriers are the most likely to expand their capacity. Richard Mikes, of Transport Capitol Partners, revealed that the increase of rates were making it less risky for some carriers to add capacity in 2012, especially as the demand for freight rises.
According to research done by the Transport Capital Partners, 33 percent of larger trucking companies, those that had more than twenty five million in revenue, planned to increase the capacity of their loads from 6 percent to 15 percent, a 9 percent increase. One of these larger trucking companies with higher revenues is Knight Transportation, a carrier based in Phoenix, Arizona. In 2011, they increased their truck count by 2.9 percent. Knight Transportation will raise its truckload rates from 3 percent to 4 percent in the following year, allowing it to add even more capacity. This will allow for an increase in truck driving jobs as well. Knight Transportation's chairman and CEO, Kevin P. Knight, claims that they will continue to work towards increasing the fleet. According to Knight, Knight Transportation intends to increase their fleet anywhere from 4 percent to 7 percent, as long as the productivity and rate structure continues to improve.
According to research done by Americas Commercial Transportation the order backlog for trucks rose to almost 125,000 units. With the demand so high for Class 8 trucks, manufacturers are struggling to fulfill their orders. Older trucks, which were purchased before 2007 when stricter federal diesel engine emissions regulations went into effect, will be replaced by most of the newer trucks ordered this year. According to research done by FTR Associates, freight demands will outstrip GDP as truck capacity tightens and rates rise for North American Shippers. FTR's senior consultant, Larry Gross, stated from their research that this would keep transport capacity tight resulting in a continuous upward rate pressure.