William B. Cassidy | Sep 27, 2011 10:49AM EDT
Flatbed trucking rates are on track to rise 6 percent this year after rising 6 percent on average last year, according to investment research firm Stifel Nicolaus.
Tight capacity is ratcheting up flatbed pricing faster than dry van truckload rates, which are rising 3 to 5 percent on average this year, the research firm said.
“Flatbed capacity remains tight leading to sustainable price increases,” transportation analyst John G. Larkin said in a Sept. 27 note to investors.
“It is clear to us that capacity in the flatbed market has been, and continues to be, more scarce than other modes of transportation capacity,” Larkin said.
That’s good news for companies such as Universal Truckload Services, which expects third quarter revenue to increase 10 percent year-over-year, he said.
UTC increased revenue 27 percent in 2010 to $376 million, according to data from SJ Consulting Group, making it the second largest U.S. flatbed carrier.
Overall, the top 10 flatbed carriers, led by Landstar System, increased their revenue 15.3 percent on average in 2010 to a combined $3.4 billion, SJ Consulting said.
Flatbed haulers are benefiting from a more robust recovery in industrial freight compared with consumer durable goods, according to Stifel Nicolaus.
The growth of hydraulic fracturing in the oil and natural gas industries and increases in industrial equipment production benefit flatbed carriers.
In addition, industrial freight volumes fell further than consumer goods during the recession, and therefore have more room to recover, the research firm said.
The biggest challenge for flatbed carriers right now is finding drivers, particularly owner-operators, said Larkin, a challenge shared with other types of carriers.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc