Executives from some leading U.S. trucking firms appear optimistic that demand may be showing signs of turning the corner.
Because of tightening capacity fueled by a federal crackdown on nondomiciled commercial driver licenses and CDL mills, executives say the industry’s oversupply has been exiting the marketplace. Carriers either being forced to shut down over lost business or filing for bankruptcy is also influencing this trend.
Leaders from J.B. Hunt Transport Services, Schneider National, Ryder System and Werner Enterprises discussed the prospects of a market upturn and capacity tightening at recent investor conferences and news media podcasts. Here’s what they had to say:
Shelley Simpson, president and CEO, J.B. Hunt
“After our fourth quarter earnings call, I talked about the market feels fragile, specifically from what's happening from a supply side perspective,” Simpson said during the annual Raymond James Institutional Investor Conference on March 3. “I would tell you, from a demand side, it's been slightly better than what we expected from a customer perspective. I don't think any customers are expecting a real boom in business. And so we're not expecting a big pickup from a demand side, but we're very focused on just making sure that we take market share and what we can control from a growth perspective overall.”
Robert Sanchez, chairman and CEO, Ryder System
“The PMI being above 50% is always a good thing,” Sanchez said during the Barclays Industrial Select Conference on Feb. 18, referring to the Purchasing Manager’s Index, which reports on manufacturing industry performance. “That helps manufacturing, should help the freight market. Spot rates being up is a good thing also. It's an early indicator. The FTR truck utilization being over 95% is a good indicator. That's also up. So these are all good things.”
Mark Rourke, president and CEO, Schneider National
“Everybody has been under the same pressure to get inventories right,” Rourke said during Citi’s Global Industrial Tech and Mobility Conference on Feb. 18. “And I think the fact that we're not carrying that inventory, I think, can be a catalyst for a replenishment cycle, not calling that just yet. But I think all those signs are much more positive.”
Derek Leathers, chairman and CEO, Werner Enterprises
“I think you're going to see more attrition through enforcement,” Leathers said during the Stifel Transportation and Logistics Conference on Feb. 10. “I think you're also seeing attrition, unfortunately, for those that didn't survive. This has been a really, really tough two, three-year period and really a week hasn't gone by in recent weeks where you haven't started to see regional or even kind of middle-tier players going under and filing for bankruptcy. So that's going to take more capacity out. I think the supply is supported, that constriction is supported further by now expanding enforcement to include driver training schools and the lack of standards and quality there, the lack of enforcement on electronic loggings and people now really focusing their efforts on getting their arms around that and trying to level that playing field to make sure we're doing what the law says. So, I think that's a further constriction.”
Seth Runser, president and CEO, ArcBest
"When you think about all the things that are going on, whether it's the non-domicile drivers, the English language proficiency, or the CDL schools that really could impact supply, I think we're in the early innings of a lot of that," Runser said during Bloomberg Intelligence’s Talking Transports podcast that aired March 3.
