Haulage Industry Challenged

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According to Fleet Owner, a weekly magazine and online newsletter written for the commercial trucking market, fleet utilization rates have not been as low as they are today since the early 1970’s in the grip of the post- OPEC oil crisis induced recession. In a recent article the magazine advised first and second quarter earnings will show a rapidly deteriorating position even from the fourth quarter of 2008 when operators at least had the benefit of a sudden drop in diesel costs. The paper warned that small to medium size operators will be particularly badly hit. Noel Parry a consultant with industry experts FTR said, The gap between low- and high-risk fleets is huge. In downturns, large fleets tend to do better than small fleets because they have cash reserves, and most large fleets entered this recession with a lot in reserve. The result by 2010 will be fewer and probably larger haulage companies left in the market place.

If the assessment is correct, expect bankruptcies among small to medium truckers to pick up as the first half of 2009 develops. Not wanting to hasten the demise of any smaller operators, it goes without saying buyers should ensure their cargoes are being moved on hauliers who are financially stable and not in danger of going broke. If cargoes are stranded on trucks or in transit warehouses while under the control of distressed hauliers, buyers could find they do not receive deliveries on time and even have problems reclaiming their material while rights of ownership are settled. When buyers are working extra hard to minimize inventory the last thing they need is a missing truck load of material!

–Stuart Burns

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