Schneider Predicts Rate Increases

Schneider Predicts Rate Increases

Trucking operator Schneider National — one of the largest truckload and intermodal carriers in the United States — released its own 38-page “state of the industry” report, with pricing projections for a variety of modes and services. Here’s a glimpse of what Schneider sees happening by the end of 2009:

* Truckload rates — flat, with 1-3 percent decrease in certain areas. “we expect capacity to continue exiting the market causing supply to approach equilibrium with faltering demand near the end of the year.”

* LTL rates — 1-3 percent increase. “Any shift in the capacity balance or the loss of one of the major players could result in violent increases.”

* Intermodal — 1-3 percent increase. “Increased economic pressures on shippers will continue to push more traffic from truck to rail.”

* Ocean — 4 percent decrease. Capacity in the global fleet is expected to increase 12.7 percent in 2009, while global container traffic growth is expected to only be around 2.8 percent.”

* Smallpack/Air — 4-5 percent increase. “Less sophisticated buyers and those with less volume leverage will likely pay more citing less competition and aggressive pricing positions by UPS/FedEx.”

* Rail — 1-3 percent increase. “If weekly rail statistics are a means of checking the freight industry's vital statistics, it's getting harder to find a pulse.”

Some of those projections seem a bit rosy — but Schneider insists they are realistic. The pricing increases will come, the company believes, as capacity is reduced.

“Expect bankruptcies to elevate throughout 2009, combining a weak freight and tight financing environment,” says Schneider.

What do you think?