Truckload’s Cloud May Have a Silver Lining

March 22, 2000 10:38 AM, EST

There’s no shortage of reasons to be pessimistic about the state of the truckload industry. Fuel costs are up, used truck prices are down and drivers are in short supply. The Fed is raising interest rates, and stock prices are in the dumper.

	Michael James - Transport Topics
	Diesel prices have hit historic highs, but analysts think the rise will slow the economy and help truckload carriers raise rates.

With each negative, though, there is a potential silver lining. High fuel costs could drive many small fleets and independent truckers out of business, reducing freight-hauling capacity and making it easier for remaining carriers to raise rates. Declining prices for used tractors and trailers may weaken the financial position of many carriers, paving the way for additional consolidation and long-term growth in the industry.

Even the possibility of higher interest rates could work to the advantage of truckload fleets by slowing the economy and making it easier to compete for workers.

“The consensus view is decidedly negative,” said Donald A. Broughton, a transportation industry analyst with A.G. Edwards & Sons in St. Louis. “And the consensus view is usually not right.”

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