WASHINGTON — The crash in the U.S. real estate market, including declining property values for commercial properties, is turning into an unlikely boon for trucking carriers looking for new digs, reports Traffic World Associate Editor John Gallagher in a Special Report titled "Terminal Buy Time."
"The recent collapse of commercial real estate has provided a rare opportunity for companies that previously had a hard time finding space for terminals," said Traffic World Editor-in-Chief Paul Page. "It’s the flip side of the real estate crash, at least for trucking companies that have the cash to take advantage."
Not since Consolidated Freightways unloaded 280 terminals following its 2002 shutdown have as many quality properties come up for sale, Gallagher writes.
And carriers with strong balance sheets and plenty of cash are reveling in the best real estate market in years for expanding and upgrading their LTL terminal networks.
It’s no coincidence that some larger Canadian fleets like Vitran and MSM Transportation have been busy acquiring space in the U.S. in recent years, as the value of the Canadian dollar rose at the same time as U.S. real estate prices fell.
"This is the biggest high point as far as properties being on the market. There’s still a lot of pressure on the industry and potential for more closures this year. I don’t think they’ve hit their peak yet," says broker Will McFarlin of Burr & Temkin, a real estate firm specializing in the transportation industry.
The article notes that terminal network realignments and operation downsizings, more so than bankruptcies, are resulting in bigger hits to the real estate market in the LTL sector. For example, in November Con-way Freight stripped 40 facilities out of its 303-terminal network in a move estimated at saving the carrier $30-$40 million and eliminating 124,000 miles per day from its system.
Calling this "a trend that’s been years in the making — and built momentum as the freight economy plummeted and the credit markets tightened," Gallagher reports that saving money with more efficient terminal operations has moved beyond a means of competing to a key to surviving.
— via Truckinginfo.com
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