Less Thank Truckload (LTL) Industry Sees Increased Freight Quotes and Absence of Cheap Freight
If we were to select a single sector of transportation that went through the worst economic situation within the last twelve months, we must absolutely pick Less Than Truckload Carriers (LTL carriers). With top Trucking Companies such as Fed Ex Freight and Con-Way laying off personnel in addition to posting losses, right now there is no question Less Than Truckload Carriers have struggled. Challenged by high fixed-costs on one hand and truckload capacity dropping virtually 30%, many of us foresee a tough path ahead for the Less than truckload carrier industry. One of the problems is over capacity and empty trucks, despite freight quotes falling and cheap freight becoming readily available. Many experts are actually concerned exactly what may occur as soon as government stimulus capital injections quit and the supply chain demand coming from logistics companies, freight brokers, and shippers is left to a more natural, un-subsidized level. The actual question turns up quite simply to lower freight quotes to find freight for empty trucks, or to continue to run trucks with empty space. All Stakeholders in the Freight Industry: Shippers, Freight Brokers (Logistics Professionals), Owner Operators and Carriers alike are inclined to are in agreement that Freight rates tend to be increasing. On the other hand, various other analysts consider that the likelihood of losing a number of carriers over capacity will not be a major problem. "Most carriers have been running lean for the past 36 months." said Brad Hollister of Freight Access, Inc. "We have heard of the troubles of some of the larger carriers for sometime, but it appears that bond holders are not willing to cut their losses quite yet and are being patient in monitoring performance. This may have to do largely because of the state of the overall economy. Not only is there a lack of other investment opportunities, but there is virtually no market for liquidating assets, particularly in the used truck market." Currently, it seems that the LTL Carriers in the freight industry have certainly made it through a really hard time. "Most companies are lean right now and virtually all are announcing better than expected results, which will continue to strengthen the sector going forward." said Hollister. Brad Hollister went on to say "The question remains who fast will rates continue to raise going forward as demand increases. It is the age-old question of raising rates sharply to capture profits or more moderately in order to regain market share. It appears that every carrier has a different philosophy so it will prove to be a marketplace filled with opportunities over the upcoming months." Brad Hollister is the Director of Business Development for Freight Access, Inc.. Brad Hollister loves Networking with Entrepreneurs, and learning about new business Opportunities. His professional focus on the transportation and logistics industry as well as helping non-profit businesses. |
|
