Current Transportation Capacity Glut is Forcing Many Independent Truckers Out of Business

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Published at: www.scdigest.com

It Will Get Worse For Small Truckers Before It Gets Better

March 18, 2008

Analysis by: GLG Expert Contributor

There is no question that small truckload carriers and owner-operators are hurting.  There is also no question that it will get worse in the short-term.  In addition to soft freight demand, the small trucker is facing the softest cash flow quarter of the year, renewal of tags, increased insurance costs and they have to pay taxes soon.  From where we sit, the Bear Stearns Bankruptcy Index looks conservative.  What do you have to believe in order to believe that all of this is going to change and get better?  Housing and/or automotive has to make some move upwards.  Together, those industries generate a disproportionate amount of the tonnage in the truckload industry.  It is hard to imagine a freight recovery without some leading sign of life in these areas. Given the amount of capacity that has come out of the market, a small move in housing and automotive could lead to a very quick capacity shortage and resulting rate recovery.  It is just not demand, but supply as well.

Capacity exiting, is it really good for the trucking industry?

March 5, 2008

Analysis by: GLG Expert Contributor

Mr. Schulz your analysis offers some sound information, but does monopolization really help in any business sector?

John SchulzIndependent Analyst - Contributing EditorLogistics Management Magazine

With Capacity Exiting Trucking Industry, Will Rates Inevitably Rise?

March 4, 2008

  The current slump in ground freight demand is taking its toll on some independent truckers, pinched between high fuel costs and slack demand.   One truck repossession company reports it more than doubled the number of trucks it repossessed in 2007 compared with 2006.   But at least one transportation consultant believes this is a good thing because "the invisible hand of Adam Smith" means that eventually this lessening of capacity will mean higher trucking rates for the survivors.