Trucking execs express
about outlook for 2011
May 5, 2011 9:39 AM
Nearly three-quarters (71%) of trucking company executives surveyed by GE Capital, Transportation Finance expect business conditions to improve in 2011, but they are concerned about the impact of external and internal factors on their profit margins.
The rising price of diesel, a nationwide shortage of drivers and the twin costs of complying with government regulations, and maintaining their own aging fleets are all concerns.
Asked to identify their company’s top three business opportunities this year, a full 75% of respondents said they expect existing customers to ship increasing volumes of goods. The same number said they foresee an increasing rate environment. Sixty-eight percent of respondents expect to acquire new customers in 2011.
Executives said their biggest challenge will be recruiting and hiring quality drivers, cited by 74% of survey respondents. Two other widespread concerns are the rising costs of diesel fuel (67%) and equipment parts and maintenance (41%). Additionally, they are concerned about operational costs of complying with recent government regulations related to the hours that drivers may work and the reporting of safety, compliance, vehicle, driver, and regulatory violations to the Federal Motor Carrier Safety Administration.
While shipping capacity is tight, nearly half (48%) of survey respondents expect the number of competitors in their market to decrease while an additional 39% expect the competitive landscape to remain unchanged.
Additional findings from the survey include:
•A significant portion of carriers intend to maintain their fleet size in 2011; however, 68% anticipate adding to sleeper cab fleets and 70% adding to trailer fleets in 2012.
•Forty-nine percent of carriers expect the average age of their fleets to decline in 2011, likely a result of replacing older equipment; 25% plan to continue using existing equipment.
•Carriers are positive about having adequate access to capital this year, with 43% expecting it to increase and 46% expecting it to stay the same.
•Executives of fleets with 1,000 or more trucks are generally more optimistic about business conditions than those with smaller fleets, likely due to the latter’s regional exposure.
•Those in the Southeast are most positive about trucking conditions, while those in the Southwest are least optimistic.
To view the executive summary of the 2011 Transportation Survey results, access www.americas.gecapital.com/GECA/documents/2011_GE_Transportation_Survey_Exec_Summary.pdf.
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