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Fleets Say Rates of Return Too Low To Seek New Investments

Posted: August 1, 2014

WINDSOR, CO. — Nearly half of carriers surveyed in Transport Capital Partners (TCP) Q2 industry survey believe they aren’t seeing enough of a return on their investments (ROI) to warrant purchasing new equipment.

Just over 50 percent of carriers surveyed were seeing enough ROI to justify new equipment, up four percentage points since November 2012.

One third of all carriers don’t plan to add new equipment. Currently, replacing aging fleets is the primary driver of equipment purchases.

“Higher equipment costs in recent years, combined with the lower utilization resulting from new HOS rules, will continue to make adequate returns on investment a challenge,” says Steven Dutro, TCP partner.

In regards to accessorial charges, 73 percent of carriers expect the rates to rise in the next year. However, 45 percent don’t think they’ll be able renegotiate accessorial charges, the survey finds.

Larger carriers are considerably more optimistic than smaller carriers that they will be able to raise accessorials.

Sixty-four percent of smaller carriers believe they won’t be able to negotiate accessorials. Meanwhile, only 37 percent of larger carriers are in the same boat.

“As freight demand grows, shippers who need consistent service will need to assist carriers in gaining operational efficiency and adequate compensation. Larger carriers are more confident they are positioned to achieve this customer cooperation,” says TCP Partner, Richard Mikes.

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