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2012 Freight Demand May Push Trucking Capacity Limits

Published January 6, 2012
Categories: Trucking

Transport Topics reported that as expectations for the nation’s economic growth remain subdued, trucking may be on the cusp of a profitable ride as freight demand in 2012 pushes against the limits of industry capacity.

Citing David Tamberrino, an analyst for the investment firm Stifel, Nicolaus & Co., the article noted that he expects freight rates to rise faster than inflation in 2012, and for both truck and rail operators to enjoy expanding profit margins.

The report cited ATA chief economist Bob Costello as saying he expects production and sales of new trucks and trailers to remain strong in the next year, as fleets continue to replace older equipment while at the same time keeping a lid on fleet expansion.

The piece quoted officials at GE Capital as noting that to stay ahead of rising operating costs, fleet operators will need to continue to push up pricing in the year ahead.

Regarding the impending lease accounting changes, the article cited a December report from the ELFA saying the changes could have a widespread detrimental effect on the U.S. economy, triggering a $10 billion reduction in GDP and 60,000 fewer jobs by 2016. Such a change would add an estimated $2 trillion in debt to balance sheets of companies in a wide range of industries, including transportation, retail and manufacturing, utilities and construction firms, the article said.

To read the full Transport Topics article (subscription required) click here.

Previously on monitordaily: ELFA: Lease Accounting Proposal Could Negatively Impact Economy, published December 7, 2011