Though many are blaming brutal winter weather for the sharp slowdown in U.S. economic growth in the first quarter, some feel it indicates freight volumes may not strengthen as much as predicted, leaving carriers with little or no leverage to raise rates.

“Freight remains plentiful, but attitudes are mixed with respect to how sustainable the current tightness in supply and demand might be,” noted John, managing director and head of transportation capital markets research for Wall Street firm Stifel, Nicolaus & Co., in a recent update penned after attending the29th annual Trucking Profitability Strategies Conference at the University of Georgia in Athens, GA, last week.

“Some [carriers] fear that once supply chains are reset after the challenging winter and once the spring and summer merchandise has been delivered to market, that we could well end up with a softening of freight demand in the third quarter,” he said. “Nonetheless, many carriers spoke of mid-single digit year-over-year rate increases secured already in 2014. [Yet] how widespread these rate increases are is difficult to ascertain.”

The first quarter U.S. economic slump – U.S. gross domestic product [GDP] only increased a scant 0.1%, according to data compiled by the Bureau of Economic Analysis – is already leading many businesses to “moderate” their growth plans for the year.

According to the most recent Business Confidence Survey by human resource management firm Insperity, Inc., that polled 5,300 firms in late April, small business owners is particular are maintaining a “positive outlook” but are moderating what the firm called their “aggressive economic plans” voiced in January.

A more conservative 39% of those U.S. small business owners polled now plan to add employees compared to 50% in January, with 79% of respondents expecting to meet or exceed the 2014 performance objectives they set in January, down from 92% in the last survey. On top of that, 21% now expect to do worse in 2014, more than doubling the 8% reported in Insperity’s last quarterly poll.

“The optimistic 2014 outlook from our business owners in January is still present, but has been moderated by the ongoing realities of a challenging economy,” noted Paul Sarvadi, Insperity’s chairman and CEO. “True to form, businesses seem to be doing all they can to move ahead while balancing economic opportunity with the restraints of increasing government regulation, which was the top long-term concern named by our survey respondents.”

“The GDP report showed the economy slowed to a near zero pace, highlighting just how low of a low the economy is recovering from but also highlights just how inadequate the ‘rebound’ has been thus far,” added Lindsey Piegza, chief economist for Sterne Agee, in a research brief.

She added that manufacturing activity in the U.S. – a big driver of freight demand – is coming up mixed as well, with the metrics compiled by the Institute for Supply Management (ISM) indicating that production fell slightly to 55.7 in April from 55.9 in March; backlog of orders slipped from 57.5 to 55.5; and new orders were unchanged at 55.1.

On the stronger side, employment improved from 51.1 to 54.7, a four-month high and new export orders improved from 55.5 to 57.

Piegza called those numbers “a welcome step in the right direction” suggesting manufacturing activity improved in April after weakness at the start of the year. “Despite that rise, however, headline growth remains noticeably below the pre-winter weather levels, muddying the outlook for further momentum in the second quarter,” she pointed out.

In terms of freight transportation impact, Scott Davis, chairman and CEO of United Parcel Service, noted that with much of the U.S. economy negatively affected by the severe weather conditions in the first quarter, UPS witnessed lower operating results versus the prior year.

Overall, UPS posted diluted earnings of 98 cents per share in the first quarter, as six cent decline from same period in 2013 adjusted results. Operating profit for the quarter dropped $106 million to $1.5 billion, with the unusually harsh weather weighing down operating profit by approximately $200 million, due to increased expenses and slower revenue growth. And though average daily shipments in the U.S. for UPS climbed 4.2%, that came primarily from large e-commerce shippers using lightweight deferred shipping solutions, the carrier said.

Still, Kurt Kuehn, UPS’s chief financial officer, believes that the “momentum of the underlying business” got masked to a degree by the disruptive impact of “inclement” winter weather this year.

“We are encouraged by the positive trends in our business and expect the remainder of the year to perform as we originally guided,” he in UPS’s first quarter earnings report. “However, due to the challenging start to 2014, we anticipate diluted earnings to be at the low end of our full-year guidance range of $5.05 per share to $5.30 per share.”

Yet where trucking is concerned, Stifel’s Larkin isn’t so sure the ability to capture and keep rate increases is a done deal.

“We believe that the underlying economy simply isn't strong enough to drive the incremental demand necessary to tighten supply and demand sufficiently to allow big enough rate increases to cause us and others to publish upwardly revised EPS [earnings per share] estimates,” he explained in the firm’s research note.

“While this outcome increases in probability as we move into 2015 and beyond, we aren't convinced that we are there just yet,” Larkin added. “So we will continue to await a market correction or compelling evidence that the economy is breaking out of its 2% per annum annual GDP growth pattern.”