More Carriers Making Strategic Shifts Post-Recession: TCP

(April 23, 2012) – More carriers are adjusting basic business models and strategies searching for current and longer term success, according to Transport Capital Partners' (TCP) First Quarter 2012 Business Expectations Survey.

Nineteen percent of carriers report changing their type of haul during, a 25 percent increase from a year ago. Although, the majority of carriers however (68%) have not made any changes to type of haul, type of equipment, or commodity.

"Long term strategy has come to the forefront as carriers cope with high demands for equipment and balance that with rising equipment costs, driver constraints, and operating dynamics," said Richard Mikes, TCP Partner and survey founder.

Carriers were asked their driver to non-driver staff ratio (excluding maintenance but including owners and executive staff) for both 2005 and 2011. Overall, carriers have become slightly leaner in the last six years.

While smaller carriers have higher percentage of driver to non-driver ratio of six or better compared to that of larger carriers (42% vs. 25%), "this is most likely due to employees who each perform a variety of tasks at smaller carriers," said Lana Batts, TCP Partner.
 
Compared to a year ago, carriers are more confident that they can renegotiate accessorials such as fuel surcharges and detention times. A third, however, don't feel confident in their ability to renegotiate accessorials, an increase from only 19 percent of carriers in February of 2011.

"Carriers are focusing on big ticket items such as driver time (i.e. detention) and fuel cost reimbursements in rate discussions this time," observes Mikes.
 
Additionally, some of these staffing decisions may be the result of changes to comply with CSA 2010 regulations. Seventy-eight percent of carriers have added training so that carriers may better understand how CSA 2010 will affect their careers, and 55 percent of carriers have invested in monitoring technology; both of which require company resources.

There has been a significant change however in the amount of time that it takes for carriers to get paid. In February of 2009, a little over a year after the recession began, 57 percent of carriers reported seeing their Daily Sales Outstanding (DSOs) increase. Now, three years later, only 28 percent report this increase.  There was not a significant difference found between carrier size and average DSO time, according to the survey.