Fleet Management News & Business Info | Commercial Carrier Journal
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ECONOMIC OUTLOOK: MANAGING THE MOVING PARTS projects that it will lag demand, translating into a 5 percent average increase in truckload base rates in 2012. "We have had probably the most significant rightsizing we have ever seen in our industry, " Costello says. The result has been gains in average revenue per mile. Costello points to the flatbed segment, which lost the most capacity in percentage terms. Through September, flatbed loads are down 2.8 percent in 2011 compared to 2010. But average revenue per mile is up 7 percent. Because of all the capacity coming out of the trucking industry, the current situa- tion is essentially balance, says Larkin. "If the economy were to accelerate, then the supply- demand dynamic becomes wildly favorable to the trucker. In the monthly MarketPulse survey conducted by Randall- Reilly and CCJ, 57 percent of carriers say that driver availability is their top concern now, and two-thirds believe it will be their biggest challenge in 2012. Driver quality – or lack thereof – due to the Compli- ance Safety Accountability program, the Pre-employment Screening Program and adoption of electronic logs is a big factor in trucking's tight labor market, but it's not the only one. Many carriers point to government policy. Although unemployment insurance might provide a welcome stream of cash into the economy, it can disrupt business in industries such as trucking where there are jobs available. "Until we stop the FAST-RISING COSTS EXPECTED IN 2012? PERCENTAGE OF TRUCKING EXECUTIVES WHO SAY ITEM WILL RISE THE MOST IN 2012 (IN PERCENTAGE TERMS) 1. DRIVER PAY 2. FUEL 3. HEALTH CARE 4. DRIVER RECRUITING 5. TRACTORS 6. TIRES 7. TRUCK PARTS 15% 15% 33% 14% 12% 3% 9% " IN THE MONTHLY RANDALL-REILLY MARKETPULSE SURVEY, ONE-THIRD OF CARRIERS SAID THEY EXPECT THE GREATEST 2012 COST INCREASE IN PERCENTAGE TERMS TO BE DRIVER PAY. OTHER CARRIERS SPLIT PRETTY MUCH EQUALLY ON FUEL, DRIVER RECRUITING, HEALTH CARE AND TRACTORS. RANDALL-REILLY MARKETPULSE REPORT, NOVEMBER 2011 CASS FREIGHT INDEX JANUARY 1990 = 100 THE CASS FREIGHT INDEX FROM CASS INFORMATION SYSTEMS SHOWS EXPENDITURES ON FREIGHT SIGNIFICANTLY OUTPACING SHIPMENTS, A REFLECTION OF THE PRICING LEVERAGE CARRIERS CURRENTLY HAVE DUE TO TIGHT CAPACITY. CASS INFORMATION SYSTEMS, INC. 1.30 1.40 1.50 1.60 1.70 1.80 1.90 2.00 2.10 2.20 2.30 1.20 1.10 1.00 1999 2000 2001 2002 2003 practice of paying people al- most two years to sit at home on unemployment, this coun- 52 COMMERCIAL CARRIER JOURNAL | JANUARY 2012 2004 2005 2006 2007 try will never fully recover," says Keith Tuttle, president of Northwood, Ohio-based Mo- 2008 2009 2010 2011 tor Carrier Service Inc. There also is a demand side to the driver availability 2.26 NOV 11 ● EXPENDITURES ● SHIPMENTS 1.05NOV 11