William B. Cassidy, Senior Editor | Mar 29, 2012 12:00PM EDT
Truckload carriers are becoming more willing to at least consider adding capacity as freight demand increases, according to a survey by Transport Capital Partners.
A quarter of the carriers surveyed by TCP said they expected to increase capacity 6 to 10 percent over the next 12 months, compared with 7 percent a year ago.
However, 65 percent of the trucking executives who responded to the survey said they plan to add little or no capacity, down from 73 percent in November.
Overall, truckload capacity continued its long contraction in 2011. A group of six large carriers tracked by The Journal of Commerce cut tractor count 1.1 percent.
Larger carriers are more likely to expand. TCP found 33 percent of carriers with more than $25 million in revenue plan to expand capacity 6 to 15 percent.
TCP partner Richard Mikes said generally higher rates are making some carriers more confident about their ability to add capacity in 2012 as freight demand rises.
Those most likely to expand are highly profitable carriers such as Knight Transportation. Knight boosted its truck count 2.9 percent in 2011.
Knight plans to add capacity in 2012 while raising truckload rates 3 to 4 percent.
“We will work diligently to grow the fleet” as the economy expands, Kevin P. Knight, chairman and CEO of the Phoenix-based carrier, told analysts in January.
“We plan to grow the fleet 4, 5, 6 and if we’re really lucky maybe 7 percent,” Knight said. “As long as we can continue to improve productivity and rate structure.”
Demand for Class 8 trucks is high, with manufacturers struggling to fulfill orders. In January, the truck order backlog rose to 125,000 units, according to ACT Research.
Most of new vehicles ordered this year will replace older trucks, many purchased before tighter federal diesel engine emissions regulations took effect in 2007.
Research firm FTR Associates sees tightening truck capacity and rising rates ahead this year for North American shippers as freight demand outstrips GDP.
“This will continue to keep transport capacity tight throughout the forecast period, resulting in ongoing upward rate pressure,” said senior consultant Larry Gross.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter @wbcassidy_joc.
