Tight Capacity Could Hurt GDP Growth, Says Duncan

November 5, 2004 7:00 AM, EST

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T. PETE BEACH, Fla. — Trucking’s current tendency to shun expansion of tractor and trailer fleets so as to achieve higher freight rates is not a productive long-term strategy for the nation’s economic health, a top industry executive charged last week.

Douglas Duncan, chief executive officer of FedEx Freight, told the annual meeting here of the North American Transportation Employee Relations Association that artificially constraining capacity would eventually hurt economic growth. That in turn would hurt trucking, he said.

“Our industry has had an awful lot of volatility in its earnings rates,” Duncan said. “Most companies are trying to manage to their capacity. They’re not adding a lot of capacity. I think that is problematic.”

FedEx Corp. is the second-largest corporation in North American trucking, behind UPS Inc., and its less-than-truckload Freight division is the second-largest LTL carrier behind Yellow Roadway Corp.

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