Carriers Still Concerned About Credit Availability

Motor carriers are considering engines, EOBRs and credit availability as they plan for equipment purchases in the year ahead, according to the Business Expectation Survey for 2010’s second quarter by Transport Capital Partners, LLC (TCP).

“Carriers are interested in credit availability for replacing equipment, but larger carriers are more optimistic about the credit outlook,” said Lana Batts, managing partner of TCP. Two-thirds of carriers believe that credit availability will remain the same, she pointed out, while a quarter look for improvement and one-sixth of those surveyed expect it to tighten.

Discussion still remains over EPA 2007 and EPA 2010 engines as well, according to Richard Mikes, TCP partner. Based on the survey, he said “slightly over half the carriers are experiencing increased maintenance costs of five percent or more with EPA 2007 engines and are now faced with considering the new 2010 models.”

At the same time Batts says, “EOBRs are being tested by about one-quarter of the carriers surveyed with only eight percent [reporting] being operational as the industry wonders about what DOT will do.”

Both Batts and Mikes noted that the responses to the survey indicate a high degree of interest in the acquisition of other carriers. TCP is also seeing inquiries from carriers on sourcing equipment financing, as well as for potential financing for acquisitions to enable the strategic capture of new customers, drivers, and in-place equipment.

TCP, which specializes in transportation mergers and acquisitions, capital sourcing and advisory services, uses their quarterly surveys to collect the insights and opinions of executives nationwide to report on the current state of the industry and future expectations.

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