Fleet Management News & Business Info | Commercial Carrier Journal
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WITH FREIGHT DEMAND FOR 2012 UNCLEAR, CARRIERS' FINANCIAL FATES MAY REST ON HOW THEY HANDLE RECRUITING, RATES AND COSTS. MANAGING MOVING PARTS 2012 ECONOMIC OUTLOOK: THE BY AVERY VISE advantages still could prosper – provided they price their services well, which is hardly a given, he says. For Tom Wengerd, president of Berlin Transportation, a small regional carrier based in Millersburg, Ohio, there are plenty of opportunities even for small carriers that are prepared for the challenges. "Hiring and retaining qualified drivers and indepen- dent contractors will determine a carrier's level of success in the next year, " says Wengerd. "We will look for clients that will help improve our drivers' quality of life with better rates, improved loading hours and strategic lanes that will result in more home time for our drivers." As usual, carriers' fortunes will rest more on how they play the hand they are dealt than on the hand itself. The big picture Given that few analysts anticipate that freight demand will surge in the coming year – even in the best case – the condition of the overall economy might seem somewhat less important than usual in shaping the fortunes of the trucking industry. Don't be fooled; the economy remains a critical consideration. "I think the economy is kind of the wild card," says Larkin. In 2011, everyone's expectations seemed out of sync with reality, he says. People were optimistic for the first half, which wasn't 50 COMMERCIAL CARRIER JOURNAL | JANUARY 2012 G one are the days – if they truly ever existed – when a trucking company's success or failure rested solely on overall freight volume. The philosophy that a rising tide lifts all boats might have worked in a less complex era, but not now. For John Larkin, transportation analyst for Stifel, Nicolaus and Co., 2012 will be all about separating the "haves" from the "have-nots." Larkin believes that the larger better-capitalized carriers are in a prime position because they can handle lifecycle costs better and are in greater demand among shippers. But size isn't the key variable distinguishing the "haves" from the "have-nots." The carriers that will do well in 2012 are those with balance sheet strength, sophisticated driver recruiting and retention programs, strong shipper relationships and younger fleets, Larkin says. It's just difficult for small carriers to achieve all of those competitive strengths, he says. But if a rebound in freight is stronger than anticipated, carriers that lack these