Truckload Executive Says Rates Must Rise

Truckload pricing must rise alongside freight volume as capacity tightens and higher costs bear down on truckload carriers, says veteran trucking executive Pat Quinn.

"The shipping public is due for some sticker shock from trucking," said Quinn, co-chair of U.S. Xpress Enterprises, Chattanooga, Tenn., the nation's fourth-largest truckload carrier and 10th largest U.S. trucking company, ranked by total revenue.

"Rates will have to increase much more significantly than many analysts are predicting" as operating costs mount for carriers, Quinn said in an interview.

Truckload carriers are rolling into 2010 with more freight than they've seen in more than a year, but excess trucks and trailers act as a brake on potential price hikes.

That's beginning to shift, Quinn said. "We're seeing business activity improving, and supply and demand are beginning to come back into balance."

He also sees a truckload of higher costs bearing down on carriers, from rising fuel prices to vehicle licensing fees. "For U.S. Xpress, that's a $12 million check," he said.

He believes business costs will increase enough in 2010 to push more carriers into bankruptcy, tightening capacity even more quickly. "There are a lot of precarious carriers out there," he said. As costs rise, "some people are going to say, 'enough.'"

That would increase pressure on rates. "Through it all, we're what moves America," Quinn said, "but somebody has to pay for it."

Contact William B. Cassidy at wcassidy@joc.com.