Just a quick update to keep everyone in the know on what is going on the transportation industry.
Markets continue to deteriorate and with this meltdown truckload rates are plunging to depths not seen in 9 or 10 years. Fuel prices have dropped and stabilized to a point where most carriers and brokers are quoting flat, all in prices as everyone scrambles for scraps of business to keep companies afloat.
Trucking companies are shedding drivers, office staff and equipment in an effort to balance demand with their capacity, and balance expenses with their bottom lines. Their revenues are plunging, but so are their expenses to a certain degree. Certain lanes are worse than others when it comes to depressed rates and we will more than likely see additional trucking companies close their doors this year. The ones that can hang on through our recession will thrive and carry a big stick when things turn and truck capacity falls below truck demand. Companies that have a diverse customer base are situated best to survive these hard times.
Shippers are taking advantage of the markets by sending out as many RFPs or Bid Packages as possible. Times are tough for most companies and I don’t blame them one bit for shopping out their freight. Their transportation costs went through the roof last year with high diesel prices and it might balance things out a little if they can experience cost savings this year.