Slow or double-dipping?

[noproblembuddy]

Just curious about what other people think here. Does anyone else sense the industry is in a state of decline right now, as in dipping back into recession or just really really slow? Transport companies seem to be going out of business and not really adding capacity. Some critics say the double-dip thing is "overdone". I think it's a self-fulfilling prophecy. The reality is that crappy and great carriers are both kicking the bucket and it's hard to find a reliable barometer of how well the industry is doing, beyond new equipment sales. If you check stock charts for Transforce and Contrans, February 2009 looks like the bottom of the barrel and the stocks have recovered to about half of where they were 5 years ago. Contrans looks by far in worse shape than Transforce when you look at their financials and both appear to be taking a beating.

Financials - The Globe and Mail

Financials - The Globe and Mail

Any thoughts? Is it fair to say that it's not over yet and we may see more collapses? I'm guessing we will.

 

[alx]

Slowing down

It is hard to get a grip on what is going on.

The inbound has dropped considerably over the last 3 weeks. I believe this will go back up once the holidays are definately over and kids are back in school.

As for the outbound. There has been a marked increase. Clients that have been slow since Christmas are now starting to ship.

As for the small companies that are still around, I believe things are on the up.

The mid size to larger companies may run into problems as soon as the economy starts picking up. The finance companies will start turning the screws, tightening the lines of credit and repossesing the newer equipment, which is pretty well worthless now.

I am quite sure lots of pressure is being put on financial institutions by the equipment manufacturers not to repo recent equipment. The sales for new equipment would simply disappear.

 

[theman]

not a couble dip

I don't really think northbound has slowed down so much as the produce thing is no longer a factor ... so there is less stress on the supply right now ... normal for summer. I'm wondering if there isn't going to be a problem come September and particularly October though ... we'll see.

I would expect that southbound has improved at least some out of Ontario ... but probably not Quebec ... automotive has stabilized and is actually improving, but many industries like furniture etc are finished.

I think the trucking bankruptcies have been suppressed simply because the equipment was worthless ... so no point repossessing it. Once there is more of a market for it, banks and lenders will take a stronger stance ... but then again if there is a market for equipment, it means that the trucking community considers there to be a reasonable ROI for buying equipment ... which should mean companies are operating in the black and won't have to close.

The brokers which are going down are those who are not adjusting their business models to the new reality of the US$ (foreign exchange gains are non existent) and information being more readily available ... meaning co-brokering/double-brokering is not really value added because making connections across the border is much easier than it was ... even most Canadian brokers handle some interstate freight, many have it as a large percentage of their business!!!

Rockman is the prime example of this!!! Don't think for a second that they are alone. The business model of third party logistics (and brokers) is far different than it was 3 years ago ... and not likely to return ... the strong have adjusted ... those operating in yesterday ultimately will fail.