Conditions may force carriers to conduct their businesses differently than ever before to survive the recession -- and that could substantially change the industry going forward, according to a report sent by Transport Capital Partners (TCP) following the Truckload Carriers Association (TCA) conference held in Orlando this week.

TCP, an industry consulting firm whose partners are Lana Batts, Richard Mikes, Gailyn Larsen, Miller Welborn and Steven Dutro, said the observations resulted from meetings with numerous carriers and others during the annual convention.

“Carriers feel that this recession could fundamentally change the industry, just as deregulation did in 1980 and the technology revolution did in 2000,” TCP said in the report. “As a result, they understand that they must ‘think outside the box’ about how they are going to run their companies, grow their business, hire people, employ processes, and utilize technology.”

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Conditions may force carriers to conduct their businesses differently than ever before to survive the recession -- and that could substantially change the industry going forward, according to a report sent by Transport Capital Partners (TCP) following the Truckload Carriers Association (TCA) conference held in Orlando this week.

TCP, an industry consulting firm whose partners are Lana Batts, Richard Mikes, Gailyn Larsen, Miller Welborn and Steven Dutro, said the observations resulted from meetings with numerous carriers and others during the annual convention.

“Carriers feel that this recession could fundamentally change the industry, just as deregulation did in 1980 and the technology revolution did in 2000,” TCP said in the report. “As a result, they understand that they must ‘think outside the box’ about how they are going to run their companies, grow their business, hire people, employ processes, and utilize technology.”

Highlights from the report include:

  • While tonnage is off across the board, some carriers are seeing firming of tonnage in some areas and locations. However, no one is willing to guess when they believe these isolated upticks will become a trend.
  • There are a number of fleets looking to identify acquisition candidates that fit specific needs – lanes, locations, lengths of haul, and customer types. Most are looking for companies that they can “buy and run,” but some are interested in “buy and fix” companies.
  • Shippers are making unreasonable demands on carriers for bid package renegotiation. Such rates are not sustainable, even over the short run. However, some shippers are concerned about capacity leaving the marketplace as fleets emphasize this trend.
  • Carriers are expecting that when tonnage does return, there will be a capacity crunch that will exceed that seen in 2004-2005. When that happens, carriers are unlikely to feel bound by any of the prices or service standards negotiated today.
  • Fleets do not have the slightest inclination to expand their capacity to meet the expected demands in the short term. They believe they can make more money raising rates than adding capacity and hope that the lesson from excessive equipment purchases in 2006 and the late 1990s will be remembered.
  • Low used equipment prices are adversely impacting all segments of the industry. Healthy carriers are eschewing buying new equipment because they can buy late-model used equipment cheaply, while distressed carriers do not want to leave the market because they are upside down on their equipment and do not want to leave with outstanding payments to their lenders.

TCP noted that it spoke to many fleets during the conference looking to identify acquisition candidates that fit specific needs--such as lanes, locations, lengths of haul, and customer types.

The emailed report followed TCP’s business expectations survey, taken just before the meeting, which indicated that nearly a quarter of responding carriers have seriously considered leaving the industry or liquidating in the next six months if conditions do not improve.