Survey: Truckers to replace aging tractors, but not expand
Forty percent of carriers participating in the fourth quarter survey said they would acquire (or replace) more than 10 percent of their fleet this quarter compared to 30 percent in the last survey.
The Trucker News Services
12/8/2010
NASHVILLE ,Tenn. — Good news for truck makers: carriers plan to be more aggressive in their acquisition/replacement plans compared to the previous four quarters, according to Transport Capital Partners LLC’s latest Business Expectation Survey.
“These acquisition plans are principally replacements for aging fleets, but expected freight volume increases have acquisition plans ramping up modestly,” said Richard Mikes, TCP partner.
Forty percent of carriers participating in the fourth quarter survey said they would acquire (or replace) more than 10 percent of their fleet this quarter compared to 30 percent in the last survey.
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“Most carriers have not purchased new equipment for some time and the pool of used equipment has been diminished by exports and scrapage while fleet utility is picking up,” added TCP Partner Lana Batts.
Smaller fleets are going to be less aggressive in replacing their older tractors, the TCP survey noted, adding that with smaller carriers expecting lower volume and slower rate increases, “it’s no wonder fewer are in the mood” to replace tractors.
Additionally, the lack of credit availability also weighs more on smaller carriers.
While carriers appear ready to replace an aging fleet, they have less appetite to expand their fleet capacity. More than two-thirds of the carriers said they expect credit availability to remain the same — but 13 percent of the under $25 million revenue carriers expect credit to tighten over the next twelve months compared to only 4 percent of those with revenues above $25 million, according to the TCP survey.
And fewer carriers are planning capacity increases than a quarter ago, with 41 percent saying they have no plans to add capacity, compared to 34 percent last quarter, and about one in four of carriers plan to add only 1 to 5 percent.
“Carriers have stifled expansion appetites because of increased equipment costs, looming driver shortages, and poor financial returns,” Mikes said.
The leading strategy for those carriers who plan to add capacity, however, is to utilize independent contractors — but that number was down to 21 percent from 28 percent just a quarter ago.
“Essentially this means one-fifth of the carriers who plan to expand intend to do so by changing the color of the checkers on the board, and not by buying more checkers,” said Batts.
TCP, a firm specializing in transportation mergers and acquisitions, capital sourcing and advisory services, uses the quarterly survey to collect the insights and opinions of executives nationwide in order to report on the current state of the industry and future expectations.
Mikes and Batts, both with extensive experience in transportation, directed the survey and analyzed the findings. TCP couples the survey results with conversations they hold with carriers and others in the industry to present an insightful dialogue on key issues. More information is available at TCP’s website: www.transportcap.com.
Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.
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