Trucking executives, encouraged by steadier, stronger economic growth in the U.S., are increasingly optimistic about their outlook for 2015, both in terms of freight demand and their ability to raise rates, Transport Capital Partners said.
Truckload carriers surveyed by TCP have expected volumes to grow for eight straight quarters, and that confidence continued to build as U.S. gross domestic product growth hit 3.9 percent in the third quarter and freight demand stayed high.
“While still off its peak of 92 percent in February 2011," before the U.S. recovery entered a "slow patch" that lasted until mid-2013, "carrier confidence that volumes will increase over the following 12 months has risen in the last two years, from a low of 45 percent to 76 percent today,” said TCP partners Richard Mikes and Lana Batts.
What’s more, 86 percent of the carriers surveyed in the fourth quarter expected rates to rise over the next 12 months, continuing a trend that started in November 2012, TCP said.
This time, they won’t get much argument from shippers. The overwhelming majority of shippers surveyed by RBC Capital markets expect North American truck pricing to rise up to 6 percent in 2015. A year ago, most of the shippers RBC surveyed thought rates would be flat or rise only 3 percent, at most in 2014. The resurgent economy changed that.
TCP included an unusual question in its fourth quarter survey: “Is trucking starting to be fun again?” One-third, or 33 percent, of the carriers said yes, and 55 percent said “some days.” The question echoes a comment by former Con-way executive Gerry Detter in 2004, when trucking was enjoying a strong recovery from the 2001-2003 recession. That recovery was much quicker and stronger than the rebound from the 2007-2009 recession.
With GDP expanding more than 3.5 percent in four of the past five quarters, 2015 may feel more like 2004-2005 than any year since, in terms of U.S. freight demand.