Trucking industry seeing capacity crunch
Analysts are predicting a major capacity shortage for the U.S. transportation industry. The shifting market is forcing fleets to rely on fewer trucks as a result of higher prices, which have thinned margins for trucking companies and forced them to refine their freight management to provide growth.
"The bottom line is that by every measurement, the trucking industry is compressing," Rosalyn Wilson, senior business analyst with Declan Inc., warned FleetOwner. "There are less trucks, less drivers, and fewer companies ... As a result, paying higher [trucking] rates going forward won’t be as much of a worry for shippers as not being able to find a truck to move their freight."
Recently fuel prices have been falling. Diesel fuel has declined to $3.781 per gallon, a drop of $0.065 from a week ago. This is likely to help transportation firms balance other rising costs, such as wages. The average age of drivers in the industry is climbing upward and companies are having a difficult time filling vacancies. Increased demand for qualified drivers could push operating costs higher.
However, confidence in the overall economy remains low for fleet managers. Retail sales dropped by 0.2% in May for the second consecutive month, boosting fears about a lack of long-term economic growth. This is causing many firms to look at their freight management as a way to save money.
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File Under: Transportation