Capacity at a group of six large truckload carriers slipped 0.7 percent in the fourth quarter from the previous quarter and 1.1 percent year-over-year, as tractor-trailer supply and freight demand found a rough equilibrium at the end of 2011.
A survey of the fourth quarter financial reports of the six publicly owned carriers by The Journal of Commerce found their combined tractor count declined only 1.4 percent over the past two years, but was down 7.6 percent since the end of 2008.
Only one of the six carriers added capacity in the fourth quarter, despite rising demand reflected in the American Trucking Associations For-Hire Truck Tonnage Index, which surged 6.4 percent in December and 5.8 percent in 2011. That general reluctance to add capacity could put more pressure on freight rates if economic activity and freight shipping demand gains strength in 2012.
Overall, the $10.5 billion carrier group’s capacity plummeted 15.6 percent from the end of 2006 through the fourth quarter of 2011, as the independently owned carriers cut more than 8,000 Class 8 tractors from their combined fleet. That percentage number tracks other estimates of the overall amount of truckload capacity lost since the beginning of the freight slump in 2006 that became a “freight recession” and a harbinger of the economic recession that ended in June 2009.
The deepest cumulative cuts in tractor capacity at the group came in 2008 and 2009, when the combined tractor count dropped 6.9 percent and 6.3 percent. The group’s capacity dropped only 0.3 percent in 2010, and then 1.1 percent last year.
Five of the six carriers cut capacity over the five-year period, but one carrier, Knight Transportation, consistently increased tractor count. Knight boosted truck capacity 2.9 percent year-over-year in 2011, and 6.4 percent over a two-year period.
The deepest capacity cuts were at J.B. Hunt Transport Service’s truck division, which has slashed its over-the-road fleet in half since 2006, while J.B. Hunt built up its intermodal trucking division, almost doubling its intermodal tractor count.