Two-Thirds of Carriers Plan to Increase Capacity, Only Minimally

WINDSOR, CO — Transport Capital Partners (TCP) has revealed that 65 percent of carriers surveyed plan to increase their capacity. The numbers remain nearly identical to first-quarter 2013 results.

The capacity, however, seems to be quite minimal with over three-quarters of carriers saying they will add one-to-five percent capacity, or no new capacity at all — also, very similar to Q1 2013, reported TCP.

Almost one quarter of carriers are optimistic that they’ll add over five percent capacity.

“Carriers continue to voice concerns about the ‘headwinds’ impacting operations and returns, but aging fleets and still relatively low interest rates are clearly offsetting factors,” said Richard Mikes, TCP partner.

Large carriers are cautious when it comes to capacity increases over five percent, with only 19 percent indicating they may do so. Meanwhile, 36 percent of small carriers believe they’ll add over five percent capacity.

The most common way to beef up capacity is through purchasing or financing new equipment through a TRAC Lease. TCP reported that 34 percent of carriers saw this as the most viable option.

Particularly interesting is the decline in used truck sales. Adding capacity through used purchases has dropped from eight percent in October 2011 to zero percent today.

“Used trucks with low miles are practically non-existent as carriers retain trucks rather than spending scarce cash for new trucks,” said TCP Partner Steven Dutro.

Adding capacity through contractors has also seen a significant dip over the last three years, from 30 percent down to 15 percent — a 50 percent drop.

“Contractors left the industry as their profits and cashflows were depressed in the recession, and many are not interested in returning, even as more carriers offer lease purchase plans to attract them,” said Mikes.

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