Hollister Chain

Hollister Chain

LTL Carriers Return to Profitability as Freight Loads Become Available

If we were to choose one particular sector of transportation that went through the worst economic situation within the last twelve months, we must choose Less Than Truckload Carriers (LTL carriers). With top Freight Carriers like Fed Ex Freight and Con-Way laying off employees and posting losses, there is no doubt Less Than Truckload Carriers have struggled.

Faced by large fixed-costs on one hand and truckload demand plummeting almost 30%, we anticipate a really difficult path ahead with regard to the Ltl carrier industry. One of the problems is over capacity and empty trucks, even with freight quotes falling and cheap freight starting to be commonly available. Many experts seem to be concerned exactly what could occur once federal stimulus capital injections cease and the actual supply chain demand from logistics companies, freight brokers, and shippers is left to a much more natural, un-subsidized level.

The question uncovers basically to lower freight quotes to find freight for empty trucks, or to continue to run trucks with empty space. All Stakeholders in the Freight Industry: Shippers, Freight Brokers (Logistics Professionals), Owner Operators and Carriers similarly are inclined to agree that Ltl rates are rising.

Freight Executives from Pitt Ohio Express have actually mentioned there is hardly any point in looking to broaden frontiers if you do not have the freight load capacity to fulfill demand. Analysts argue that raising freight load volume, increased tonnage, and better LTL carrier discipline are all creating a better outlook for the growth of the Less Than Truckload segment.

On the other hand, various other analysts take into consideration that the likelihood of losing some carriers over capacity will not become a significant problem. "Most carriers have been running lean for the past 36 months." said Brad Hollister of Freight Access, Inc. "We have heard of the troubles of some of the larger carriers for sometime, but it appears that bond holders are not willing to cut their losses quite yet and are being patient in monitoring performance. This may have to do largely because of the state of the overall economy. Not only is there a lack of other investment opportunities, but there is virtually no market for liquidating assets, particularly in the used truck market."

At the moment, it appears that the LTL Carriers in the industry have certainly made it through a really difficult time. "Most companies are lean right now and virtually all are announcing better than expected results, which will continue to strengthen the sector going forward." said Hollister. Brad Hollister went on to say "The question remains who fast will rates continue to raise going forward as demand increases. It is the age-old question of raising rates sharply to capture profits or more moderately in order to regain market share. It appears that every carrier has a different philosophy so it will prove to be a marketplace filled with opportunities over the upcoming months."

Full Story Here>. Full Story here: http://blog.freightaccess.com/?p=137
About the Author

Brad Hollister is the Director of Business Development at Freight Access, Inc. (
http://www.freightaccess.com
), the World's Freight Marketplace. Deemed by many to be the next generation "SMART" Loadboard, Shippers, Carriers, and Freight Brokers can how find loads and cheap freight through advanced load matching functionality leading the logistics and transportation industry.

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