Truck capacity expected to rise

April 18, 2005
Transportation forecasting firm FTR Associates said 2004’s wave of tonnage growth has appeared to crest in the first quarter of 2005

Transportation forecasting firm FTR Associates said 2004’s wave of tonnage growth has appeared to crest in the first quarter of 2005. Truck freight grew a “scant” 0.4% year-over-year in February, compared with the 5- to 6% increase seen in the first half of 2004.

“The weakness in truck freight will further impact intermodal loadings as the trucking companies take back some of the freight they were willing to give up to intermodal when their own demand exceeded capacity,” FTR stated.

Preliminary estimates show that U.S. tractor capacity in use fell slightly to 95.7% in the first quarter of 2005, but remains at historically high levels. Over the last six quarters, tractor capacity has averaged 95.4%, which is higher than the previous peak seen in 1Q 1998 at 91.2%, said FTR.

“Looking forward, capacity will start to ease throughout the year falling to 90.5% by 1Q 2006,” FTR said. “This would suggest further pricing pressure on truck rates at least through the end of this year.”

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