Trucking Rates Seen Rising as Demand Tightens U.S. Capacity

Feb 11, 2014 2:03 pm ET

(Updates with industry description in fourth paragraph.)

Feb. 11 (Bloomberg) -- Trucking rates are poised to rise in 2014 as higher cargo volumes tighten capacity in U.S. trailers, according to a Bloomberg Industries/Internet Truckstop survey.

The industry’s outlook is the most optimistic in the nine months since the survey began. About 68 percent of respondents, drawn from freight brokers and small owner-operators, expect an increase in shipping during the next six months, the survey found.

“Our Bloomberg/Internet Truckstop survey is pointing towards a tighter trucking environment from increased demand, additional regulations, and higher equipment costs,” said Lee Klaskow, a Bloomberg Industries analyst. “This should have a positive impact on truckload rates in 2014.”

So-called truckload carriers move goods from one customer in each van. It’s a group whose largest companies include Swift Transportation Co., Knight Transportation Inc. and Werner Enterprises Inc. The industry’s other major segment is the less- than-truckload business, with trailers hauling cargo from multiple shippers.

Gains in cargo shipping would support the U.S. economic expansion. Improving household finances, still-low interest rates and less-damaging government fiscal policy are poised to prop up consumer and business spending even after a slump in U.S. stock prices and cooling growth in emerging markets, according to economists surveyed by Bloomberg last week.

Good Start

About 59 percent of truckload carriers and brokers said they expect 2014 to be better than last year for the industry. Of members surveyed, about 60 percent said they were optimistic that prices would rise within the next three to six months.

The year is off to a good start. In January demand rose 3 percent from a year earlier, even as winter weather posed difficult conditions, according to the survey.

Trucking companies’ optimism over prices comes as capacity continues to tighten. New government regulation means drivers work fewer hours, making the industry less attractive for job- seekers, Klaskow said.

“Most kids don’t grow saying they want to be truckers, and it’s a tough lifestyle,” he said.

In July, new federal rules took effect limiting truckers’ work week to 70 hours, Klaskow said. That crimps earning power for drivers who are paid by the mile.

--Editors: Molly Schuetz, Ed Dufner