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Truckload Capacity Tightening, Shippers Say

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By: Phil Sneed

Latest news feed from Tandem Logistics  6/29/2011:   

Shippers expect truckload capacity to keep tightening over the next year, but believe the less-than-truckload market will be more stable, according to a recent survey.

A Wolfe Trahan survey found 77 percent of shippers expect truckload capacity to get tighter, the highest percentage since 2004, the equity research firm said.

Only 31 percent of the shippers surveyed said LTL capacity would get tighter over the next year, while 65 percent expect LTL capacity to remain constant.

The shippers surveyed by Wolfe Trahan see the LTL market becoming more “balanced” over the next year, with only 27 percent reporting overcapacity.

That’s a huge drop from the 61 percent majority who said at the same time last year that there was too much LTL capacity, and a slight drop from 32 percent in the fourth quarter.

Only 14 percent of the logistics managers surveyed by Wolfe Trahan reported tight LTL capacity in the first quarter, while 59 percent called LTL capacity balanced.

“Shippers increasingly have been moving toward the middle over the past few quarters and viewing the LTL market as in balance,” the research firm said.

The survey, completed in May and released this month, shows shippers expect long-term trends in truck capacity to continue despite a recent drop in tonnage.

The tightening truckload market and more balanced LTL capacity are among the factors shippers believe will drive rates and transportation spending this year.

On average, shippers surveyed expected their transportation budgets to rise 9 percent over the next year, as tighter capacity pushes rates higher across modes.  

 The Journal of Commerce  Jun, 2011