NASHVILLE, Tenn. — Carriers are considering engines, EOBRS, and credit availability as they plan for the year ahead for equipment, according to the second quarter Business Expectation Survey by Transport Capital Partners LLC.
“The present surge of freight has spiked interest in equipment contingencies from engines to financing” said Richard Mikes, TCP partner.
Two-thirds of carriers believe that credit availability will remain the same but a fourth think look for improvement and one sixth expect it to tighten. The record low interest rates currently are relative to the carriers being able to meet bank criteria to obtain credit along with it’s price and terms, TCP noted.
“Carriers are interested in credit availability for replacing equipment, but larger carriers are more optimistic about the credit outlook,” said Lana Batts, managing partner for TCP.
TCP, which specializes 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.
Discussion still remains over the 2007 engines and 2010 engines as well. Mikes explained that in the recent survey, “slightly over half the carriers are experiencing increased maintenance costs of 5 percent or more with EPA 2007 engines and are now faced with considering the new 2010 models”.
At the same time, Batts says, “EOBRs are being tested by about one quarter of the carriers surveyed with only 8 percent report being operational as the industry wonders about what the DOT will do.”
Both Batts and Mikes alluded that the responses of the survey indicate a high degree of interest in the acquisition of other carriers as being reflective of increased activities on the buy side at TCP. Another trend is inquiries to TCP from carriers sourcing equipment financing, as well as for potential financing for acquisitions for strategic capture of new customers, drivers and in-place equipment, they pointed out.
Mikes and Batts directed the survey and analyzed the findings, coupling the results with conversations they hold with carriers and others in the industry so as to present an insightful dialogue on key issues.
TCP has regional offices in Florida, Iowa, Colorado, Pennsylvania, Tennessee, and Virginia.
Kevin Jones of The Trucker staff can be reached for comment at firstname.lastname@example.org.
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