Slowdown Helps Capacity; Not Drivers

Demand for truckload capacity shifted during the 2006 peak season, fuelled in some cases by a slowdown in the automotive and homebuilding sectors. This freed up some capacity for consumer goods during the peak shipping season. Coupled with increased use of rail/intermodal for import shipments, the 2006 season did not resemble what John G. Larkin, analyst for Stifel Nicolaus, termed two frenetic peak seasons in the second half of both 2004 and 2005.

Retailers made two inventory management mistakes in 2004 and 2005, Larkin continued. They built too much inventory and they build inventories too early. In 2006, retailers are stocking closer to the buying season, which has caused some shifts in volumes.

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