Truckers pause merger & acquisition plans: TCP

NASHVILLE, Tenn. – Over half of the truckers have not rethought their future business plans, according to a new survey by Transport Capital Partners.

And only about a quarter of carriers interviewed by the trucking market forecaster and acquisition experts at TCP say they are "planning to change their business model in this uncertain environment," said Richard Mikes, TCP partner.

"While the other quarter of respondents plan to take capital gain dividends, sell assets, or sell their firms in 2010," he added.

TCP uses the quarterly survey to collect the insights and opinions of executives in order to report on the current state of the industry and future expectations.

"Both large and small carriers report similar plans to cope, while the numbers of carriers considering leaving the industry if volumes don’t improve over the next six months rose from 13 percent to 16 percent from the last quarter surveyed," noted Lana Batts, partner for TCP.

While overall carrier interest in selling remained unchanged from the last several quarters at 20 percent, "size clearly matters, in this case," Mikes observed.

He said 30 percent of carriers under $25 million in revenue are interested in selling, while only 14 percent of those above that level said the same thing.

The number of respondents who say they would consider buying fell slightly from 38 percent to 36 percent this quarter, but TCP says it expects to see more merger and acquisition activity as carriers try to take advantage of the new environment.

"Maybe the somewhat diminished outlook by smaller carriers for rates and volumes has dampened their expectations for expansion whether it is in truck count or acquiring another carrier,” said Mikes.

Both Mikes and Batts consider the recent slowdown in freight increases coupled with the uncertain political and economic outlook, may be responsible for decreased carrier optimism levels.