I believe demand for full truckload services will be strong in 2011, with less-than-truckload volume showing only slight recovery amid aggressive competition.
Rates will be stable after rising to profitable levels in 2010, but contract renewals on lower rates will be higher as truckers try to catch up with increased costs. Carriers have no choice but to increase LTL rates — I anticipate about a 5 percent hike — that have been static for two years.
I believe the number of amalgamations, acquisitions and mergers in the trucking industry will decline this year because of the high rate of activity in 2010 and because many trucking companies can’t expect to be bailed out this year by being acquired. They will have to compete in the marketplace or fail.
Despite all the publicity about East Coast ports such as New York-New Jersey, Charleston, S.C., and Jacksonville, Fla., attracting greater business from Asia, I don’t foresee any major drop in West Coast business and I see no meaningful impact on trucking operations in the western region. Freight volume in California should show a gradual upturn in 2011, with rates following a similar pattern.
One of the biggest issues facing our industry in 2011 is a shortage of drivers. If severe, this could push rates higher than anticipated, particularly in the truckload sector.