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Carriers look for balance, shift long-term strategy, survey says

Compared to a year ago, carriers are more confident that they can renegotiate accessorials such as fuel surcharges and detention times. A third of carriers however don’t feel confident in their ability to renegotiate accessorials, an increase from only 19 percent of carriers in February of 2011.

The Trucker News Services

4/23/2012

Carriers are adjusting basic business models and strategies in a search for for current and longer-term success, according to results from Transport Capital Partners’ First Quarter 2012 Business Expectations Survey.

During the recession, 19 percent of carriers report changing their type of haul, a 25 percent increase from a year ago. The majority of carriers, however (68 percent), have not made any changes in their emphasis of business, type of haul, type of equipment, or commodity.

“Long term strategy has come to the forefront as carriers cope with high demands for equipment and balance that with rising equipment costs, driver constraints, and operating dynamics,” said Richard Mikes, TCP Partner and survey founder.

Compared to a year ago, carriers are more confident that they can renegotiate accessorials such as fuel surcharges and detention times. A third of carriers however don’t feel confident in their ability to renegotiate accessorials, an increase from only 19 percent of carriers in February of 2011.

“Carriers are focusing on big ticket items such as driver time (i.e. detention) and fuel cost reimbursements in rate discussions this time,” said Mikes.

Carriers also were asked about their driver to non-driver staff ratio (excluding maintenance but including owners and executive staff) for both 2005 and 2011. Overall, carriers have become slightly leaner since 2005.

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While smaller carriers have higher percentage of driver to non-driver ratio of 6 or better compared to that of larger carriers (42 percent vs. 25 percent), “this is most likely due to employees who each perform a variety of tasks at smaller carriers” said Lana Batts, TCP partner.

Additionally, some of these staffing decisions may be the result of changes to comply with CSA regulations, TCP suggested.

And there has been a significant change in the amount of time that it takes for carriers to get paid. In February 2009, a little over a year after the recession began, 57 percent of carriers reported seeing their Daily Sales Outstanding (DSOs) increase. Now, three years later, only 28 percent report this increase.  There was not a significant difference found between carrier size and average DSO time, according to the survey.

TCP uses its quarterly survey along with partner conversations with carriers to provide insight into future industry expectations. Both Mikes and Batts have long term experience in the transportation industry. Carriers desiring to participate in future surveys may apply here.

TCP provides advisory services related to transportation mergers and acquisitions, capital sourcing, and operations and strategy with regional offices in Florida, Iowa, Colorado, Pennsylvania, Tennessee, and Virginia. 

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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