by Sean Kilcarr
Could freight rates for truckers increase 5 to 8% by year-end, with that rate spike occurring despite the continued sluggish economy? Rosalyn Wilson, senior business analyst for research firm Parsons and author of the annual State of Logistics Report, thinks so.
During Wilson’s annual logistics presentation last month in Washington, D.C., she noted that while trucking posted just a 1.6% rise in revenues for 2013—one of its weakest revenue years in recent history—truck tonnage still jumped 6.1% last year. This is much higher than revenue figures would seem to indicate. She added, too, that truckload industry capacity decreased some 2.5% in 2013, largely due to a spike in motor carrier bankruptcies.
From Wilson’s perspective, that means a capacity shortage is imminent. “The trucking industry is facing a severe problem, with demand increasing while capacity is declining,” she stressed. “The capacity loss is in real vehicles as well as lowered productivity of current assets. [Yet] the downward revision in first-quarter GDP is not a harbinger of things to come for the freight industry [as] many parts of the GDP calculation have the opposite effect on our industry. Given this situation, it is apparent that carriers should be able to raise rates significantly in 2014.”
That would be welcome news for truckers, who have been angling to get and keep some serious rate increases for a while now.