Trade Resources Industry Trends Volumes and Rates Grow Over The Coming Months

Volumes and Rates Grow Over The Coming Months

The third-quarter Transport Capital Partners survey reveals more U.S. carriers are expecting to see volumes and rates grow over the coming months.

In this quarter's survey, more carriers are expressing optimism for increases in volumes and rates. Slow, steady growth in the economy has led the freight market into positive territory. And carriers are sharing their expectations for improved results.

Since a low point of 50% in third quarter 2012, positive volume expectations have risen to 61%. Larger carriers — those grossing more than $25 million per year — are much more optimistic than smaller carriers (68% versus 45%).

Carriers are also more upbeat about future rate growth. A majority of carriers (66%) expect rates will increase over the next 12 months. As with volumes, larger carriers anticipate rate increases more than smaller carriers this quarter (74% vs. 48%). This reverses a trend. Smaller carriers have often been the more optimistic about rates.

"Spot market trends over the summer have been positive for most carriers and this may be the precursor to continuing volume optimism," stated TCP partner, Richard Mikes.

Proof Will be in the Pudding

The economic recovery and future projections remain modest. As a result, carriers are not yet seeing their optimism on volumes and rates reflected in actual rate increases. Although the positive outlook has not been mirrored in rate reality, there are exceptions to this in rates for construction, petroleum, and seasonal freight.

Mikes notes, "Underlying cost rate pressure is ongoing — from new truck costs and maintenance inflation to pinched driver efficiency, from HOS changes and inadequate carrier returns."

For the past 15 quarters, more than half of all carriers have expected rates to increase. Actual rates, however, have only risen since February 2013, and even then, only 26% of respondents reported increases, up from 18% last quarter.

That number is well below last year when 42% of surveyed carriers had seen rate increases. This quarter, more smaller carriers (36%) experienced rate increases than larger carriers (20%).

"The stronger than expected volumes of the last few months are being reported by some carriers as boding well for the fourth quarter," according to the TCP partners.

Source: http://www.todaystrucking.com/carriers-upbeat-on-volume-and-rate-growth
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Carriers Upbeat on Volume and Rate Growth