With freight volumes slowing and diesel prices rising, the trucking industry is going to face a more challenging environment through the balance of 2011 and into the early part of 2012, according to the latest analysis from investment firm Robert W. Baird & Co.
That being said, trucking capacity is still expected to remain tight, thus continuing to afford carriers the opportunity to achieve rate increases, although any such increases are expected to be lower than previous gains.
“We expect broader domestic freight rate growth to continue to decelerate into the seasonally weak first quarter of 2012,” noted Benjamin Hartford, one of Baird’s transportation analysts in the firm’s most recent “Freight Flows” brief.
“Though capacity constraints should support solidly positive rate growth in 2012, we believe 2 to 3% year-over-year (YOY) growth is likely, versus the 4 to 5% YOY contractual rate growth in recent quarters absent a demand catalyst,” he added.
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