Report: Shippers to rely more on smaller carriers

| Monday, December 13, 2004

Shippers are expected to use more smaller truckload carriers in 2005, a report from investment and research firm Bear Stearns says.

The report says the change, in part, is because the smaller carriers have more capacity available. In addition, half of the shippers in the study said they planned to use more small carriers so they could distribute their freight among a greater number of carriers.

“Many shippers are seeking to diversify their exposure to carrier-specific issues and to gain access to greater capacity,” the firm’s investment analysts wrote in the report. “Shippers are seeking capacity from smaller operators and diversifying their shipper pool, bucking the long-term secular trend toward freight consolidation with a few ‘core’ carriers.”

 In part, the report says, the constraints on capacity in the truckload sector – such as it notes among larger carriers – is due to “a shortage of trucks and/or drivers.”

Land Line reader Ron Thompson of Wilmerding, PA, says that small companies offer a number of attractions for drivers that larger companies do not.

“I believe our main problem is the large companies,” he said in a letter to Land Line. “I work for a small company, and I’m very happy, treated with respect, my needs and my family’s needs are more important to them than pushing for one more load … When the small companies are gone we are going to lose a lot of good drivers.”

The Bear Stearns report noted that in recent years, a number of smaller companies have left the industry, principally due to economic factors.

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