Sluggish rates, accessorials holding back equipment investment

| July 15, 2013

Owner-operators aren’t the only carriers who’ve seen a somewhat a sluggish rate environment throughout the calendar year thus far. The second-quarter industry survey by Transport Capital Partners (TCP) shows many are still not getting enough to justify adding equipment, regardless of freight volume.

Just more than 50 percent of carriers believe they are getting the rates of return needed to justify further investment in new equipment. That’s up just four percentage points from November 2012.

One third of carrier respondents reported no intention of adding equipment.

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

The bright side of the rate situation could be in growth long-term, as we reported previously — 73 percent of all carriers see rates rising over the next year. Large carriers, however, remain more optimistic than small multi-unit fleets and owner-operat0rs.

Click through the image for more rates and accessorials analysis from Transport Capital Partners Q2 2013 Business Expectations Survey.
Click through the image for more rates and accessorials analysis from Transport Capital Partners Q2 2013 Business Expectations Survey.

Most likely in response to pending changes in hours of service, 43 percent of all carriers believe they will be able to address renegotiate detention pay, up significantly from the previous November 2012 survey. Small carriers, overall, however, were more pessimistic on accessorials. Sixty-four percent of smaller carriers see no relief in charge negotiations.

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

  • martymarsh

    More comedy, detention pay, they may get it but they won’t pass it on. Then you have the cut throat carriers that won’t require detention pay simply because they never pay it any way.
    Every article I read about trucking is so black and white, when the industry as a whole can’t get past grey.

  • TRUCKTRACY

    When we send our packet back to brokers with our detention and truck not used contract( simple: after 2 hours it is $100.00 per hour for full loads and after 1 hour on LTL $25.00 per 15 min. With the explanation we do not want detention pay, only to be unloaded in a timely fashion.) We are told that they can not use us if we are going to hold them to that contract. But yet if we are late picking up or delivering a load they have no problem withholding a fine out of our pay for the load. 6 months ago we decided if they will not sign our contract then we can not use them. It has really reduced the number of brokers that will work with us , but it is funny we do not seem to spend as much time in the docks now either.

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