Satish Jindel and equity analysts for Stifel released their observations following an investor call covering the less-than-truckload (LTL) and parcel industry segments. Among their conclusions:
“LTL market share shifts from union to non-union carriers and from long-haul to shorter-haul freight seen over the past decade should continue.
“Parcel has taken share from LTL for the last decade, but now most of that shift has stopped, especially now that UPS and FedEx each have large, national-scale LTL subsidiaries.
“Large parcel carriers should continue to prosper from the increasingly global economy.
“Teamster negotiations will be different the next time around in 2008, as the LTL contract expires before the parcel contract.
“Truckload carriers should see a favorable market environment for the next few years. As evidence of the shift in LTL freight from union to non-union carriers, Jindel noted that of the top 10 LTL carriers in 1996, 70%of the revenue resided with unionized companies, whereas in 2004, the unionized carriers controlled only 43% of the revenue.”
In addition, as regional LTL carriers have extended their transit times and are now able to go up to 800 miles in one day, the regional LTL market continues to grow faster than the long-haul market.