Mark A. DiBlasi, President and CEO, Roadrunner Transportation Systems

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Mark A. DiBlasi

The biggest challenge for 2015 will be the further tightening of capacity. I believe we are in the early stages of capacity constraints that will get much tighter over the next two years.

The primary contributor to the capacity constraints is a shortage of drivers. The driver pool is aging, the cost of operation has increased, and government regulations are reducing efficiencies. This particularly impacts smaller carriers, who have more difficulty in recruiting and retaining good drivers. There’s no question that a high-quality, safe driver is a premium in the industry today.

It is interesting to see basic economics at work. The driver shortage, combined with increasing demand from a slowly improving economy, is pushing up costs for shippers. Shippers are searching for alternatives that provide the best possible service at acceptable prices and are finding few options. Signs of capacity constraints include increased delays in ports and on rails. In addition, work stoppages at major ports are slowing things down and cutting into productivity, efficiencies and transit times. Based on November 2014, weather looks like it may be a factor into 2015. Weather issues can cause catastrophic system problems and exacerbate the capacity shortage, as we saw in early 2014.

We believe the majority of shippers now understand capacity is tight and it’s not getting better. As a result, they are more receptive to price increases, and I expect this to continue.

Acquisition activity was up significantly in 2014, and we also expect this trend to continue. Trucking companies have opportunities to increase efficiencies, better utilize their networks and build-out their service offerings through acquisitions, which add density and scalability to their existing operations.

Mark A. DiBlasi, President and CEO, Roadrunner Transportation Systems