Last Year Proves Brutal to Trucking Firms, but Better Times Predicted

by Jan Cottingham  on Monday, May. 17, 2010 12:00 am  

"That's very bullish for the overall economy," the analyst said.

"At least in the next couple of quarters, we have a very strong environment right now from a freight perspective, and I think we will continue to for at least the next four to six to eight months, unless something changes dramatically," Boughton said.

Kidd cautioned, however, that the recovery in the trucking industry would take time. "It's going to take any business that has had to draw on reserves and capital and lines of credit a long time to recoup and to get back to where the company was a couple of years ago," he said.

There are, though, opportunities for the leaner, if not necessarily meaner, carriers.

"For the survivors of this recession, those companies are going to reap the benefits now," Kidd said. "Because you're going to see the basic laws of supply and demand take shape - supply meaning the number of trucks available to haul freight and demand meaning the number of freight orders out there. And as that ratio tightens so too will the prices to haul the freight.

"We've seen estimates that freight prices will probably go up 20 percent over the next two years. That will be a necessary, in our opinion, adjustment to what has been a very difficult time for trucking companies."





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