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Most carriers in ‘parked mode’ while waiting on ‘fiscal cliff,’ says TCP report

Fifty-two percent of surveyed carriers indicated they are not making plans until they find out how the fiscal cliff will be handled.

The Trucker News Services

12/13/2012

CHATTANOOGA, Tenn. — The recent presidential election may have been close in terms of the popular vote, but the reaction to the outcome among motor carrier executives wasn’t.

Results from Transport Capital Partners’ (TCP) Fourth Quarter 2012 Business Expectations found that a vast majority of carriers are not happy with the outcome of the presidential election.

While Obama won the popular vote 50-48 percent, 93 percent of carrier executives surveyed indicated they were not happy with the presidential election outcome. Amazingly, TCP said, the 9 percent of smaller carriers that are primarily sole proprietors or LLCs as well as the poster child for the Republican Party, were happy with the presidential outcome compared to only 1 percent of the larger carriers.

“The carriers’ response was a surprise in terms of the magnitude of dissatisfaction, but was reflective of TCP's conversations in the last month with both carriers and suppliers. There is a general pause evident throughout the industry,” said Richard Mikes, TCP Partner.

Not only did the elections not provide a clear road map or mandate, the looming “fiscal cliff” has added more uncertainty to everyone’s business and personal decisions, the survey revealed.

“Trucking is a demand driven industry. Carrier executives know that if consumers and businesses are uncertain about the economy, in general, and their own personal finances, in particular, they will not be buying goods,” said Steven Dutro, a partner with TCP. “It’s not surprising that carriers are unwilling to risk their own capital if their customers are also sitting on theirs.”

Fifty-two percent of surveyed carriers indicated they are not making plans until they find out how the fiscal cliff will be handled.

Larger carriers were more inclined to not have the election results affect their plans than smaller carriers (30 percent vs. 23 percent).

“Most carriers are in a ‘parked’ mode,” until the cliff is addressed, Mikes said.

Both Mikes and Dutro observed that the lack of tax decisions is impacting activity as the year closes, and many deals are being pressured as buyers and sellers are uncertain about what 2013 holds.

Mikes and Dutro both have senior-level experience advising carriers on strategic operations as well as on mergers and acquisitions.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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