GE Capital’s chief financial officer fall survey indicates trucking companies are operating conservatively but are “cautiously optimistic.”
GE Capital surveyed CFOs of 500 U.S. middle-market companies with revenues of $50 million to $1 billion, except for trucking, where revenue ranged from $15 million to $1 billion. In addition to transportation, sectors surveyed were food and agribusiness, manufacturing, healthcare, metals and mining, retail and technology and business services.
The report compares this third quarter survey to the one the company conducted the first quarter of this year, unless otherwise noted.
Michael Zimm, a transportation senior research analyst, described GE Capital’s view of trucking as “Slow but positive growth in tonnage and slowly improving operating metrics through the third quarter has truck transportation executives cautiously optimistic about the near term,” he stated.
However, demand visibility is still poor, fuel price volatility continues and new truck delivery lead times remains short, he wrote.
The result is “carriers feel little sense of urgency to add anything more than small increments of capacity ahead of demand.” This caution will “persist at least until domestic fiscal and political uncertainties are resolved,” Zimm concluded.
The report included questions asked only of the 52 transportation respondents.
Sixty-eight percent of trucking executives said this year’s greatest business opportunities are increasing average revenue per loaded mile, up 9 points from the first quarter. Sixty-two percent said the largest opportunity is increasing tonnage volume from existing customers, a 5-point increase from earlier this year.
While 58 percent see fuel price fluctuations as their top concern, this represents a 9-point drop from the first quarter. Fifty-six percent said their biggest worry is the impact of safety and accidents.
Regarding regulations, 52 percent were the most concerned about hours-of-service rules and 37 percent about safety rules.
Transportation led in responses to some questions compared to the other six industry sectors:
- Trucking was the lead in plans to raise prices (56 percent) as well as for hiring, with 79 percent reporting expecting to hire in the next 12 months.
- Sixty-seven percent are mulling plans for financing equipment, outflanking other industries surveyed.
- Trucking had the biggest hike in credit availability across all sectors at 35 percent.
Dan Clark, president and general manager of GE Capital, Transportation Financial Services, said transportation executives appeared to have a positive outlook and the Christmas shipping season looks “fairly good.”
Still, concerns remain, he said.
“Survey respondents said that their biggest opportunity was raising revenue per loaded mile — that tells us that capacity is still very tight,” Clark stated. “At the same time, we’re still seeing concerns about the impact of fuel prices, regulation and healthcare.”