Truck pricing is expected to rise by low to mid-single digit percentages over the next year, as shippers, brokers and carriers deal with tight capacity and rising costs.
Speakers on a Journal of Commerce webcast Thursday said the truckload and less-than-truckload markets are balanced in early 2012, but they could soon tighten.
“At this point in time, there are enough trucks in place to handle the freight,” said Gary Girotti, vice president of the transportation practice at Chainalytics.
Truckload and LTL markets will tighten over the course of the year, “but I don’t see any macroeconomic factors that would lead to super-tightening,” Girotti said.
“I don’t see us going back to 2003 or 2004, when getting trucks was a daily knife fight,” he said. However, he said shippers should be prepared “for regional shocks.”
Trucking analyst John G. Larkin expects “low and steady” price increases, excluding fuel surcharges, “as shippers begin to worry about the availability of capacity.”
“The freight outlook for the next couple of months looks reasonably solid,” said Larkin, managing director for transportation research at Stifel Nicolaus.
Retail sales “are at a higher level of activity than at the previous peak before the downturn,” Larkin said. “That surprising based on high unemployment.”
Larkin and Girotti told an audience of shippers, freight brokers and truckers they will have to cooperate more closely to keep a lid on rising transport costs.
“Transportation procurement has become a full-time process again, the way it used to be,” Girotti said. “ You have to interface with your carriers on a full-time basis.”
Multi-year contracts and attempts to guarantee capacity at higher prices aren’t the best solution for shippers concerned about rising truck pricing, he said.
You have to be realistic as a shipper,” said Girotti. “You can’t force the carrier to hold a rate for two or three years. Transportation networks change dramatically.”