Carriers Will Continue To Be Conservative In Replacing Fleet Equipment
Results from Transport Capital Partners’ (TCP) Fourth Quarter 2012 Business Expectations Survey found that carriers will continue to be very conservative in replacing their fleet equipment over the next twelve months. Although there is an increase in carriers planning to acquire 11-25 percent of their tractor fleets (in line with a four-year trade cycle), sixty-percent of the smaller carriers (under $25 million in revenue) and forty-five percent of larger carriers indicated they were going to replace under 10 percent of their tractor fleets. In essence, smaller carriers will be relying on older equipment which has higher maintenance costs and is more prone to poor CSA road inspections.
The survey also found that almost half of the carriers do not plan to add any capacity in the coming year, the highest percentage since this question was initially asked in August of 2010. Smaller carriers were more adamant than larger carriers in their outlook to not add capacity in the next year – sixty percent compared to forty three percent. This clearly reflects the apprehension apparent in rate and volume expectations.
With rates remaining stable, costs going up, and an inclination to not add capacity, it’s not surprising that over half of the carriers surveyed report they are not getting an adequate rate of return to invest in newer, more expensive equipment. A slight majority of the larger carriers (51 percent) say they are getting enough returns to justify reinvesting in equipment, compared with only forty percent of the smaller carriers.
