Nearly two-thirds of the carriers surveyed by Transport Capital Partners indicate they plan to increase capacity in the next 12 months, up from 51 per cent last quarter.

Carriers remain conservative, however, in estimating how much capacity they will add, TCP reports in its first quarter Business Expectations survey. Thirty-eight per cent report that their capacity additions will be 5 per cent or less, while only 20 per cent of carriers plan to increase capacity by 6-10 per cent.

“The industry has historically responded to more freight with more trucks, somewhat to its own detriment. With the driver issues, regulations and tight profit margins of this cycle have been different so far,” says Richard Mikes, survey leader and TCP Partner.

Larger carriers appear more conservative than the smaller carriers in their expansion plans. TCP believes most of this capacity increase will be in specific business lines (e.g., dedicated carriage and intermodal) rather than across the board general fleet increases.

“Going into the recession, publicly owned carriers cut trucks 20 to 25 per cent and they have not added back more. Most trucks are being sold as replacements,” Steven Dutro, TCP partner emphasizes.

For the first time since February of 2011, the number of carriers who plan to add capacity with owner-operators has increased (22%, which is up one-third from the all-time low of 17% in the fourth quarter of 2012).

Meanwhile, the majority of carriers (76.6%) report rates remain about the same for the past three months. The survey also shows carriers are optimistic, with nearly two-thirds expecting volumes and rates to increase in the next 12 months.

Twelve percent of the carriers indicated that rates have decreased, however, with the majority of those being companies of less than $25 million in revenue.

“With the present tight slight supply of trucks, an increase of just 1-2 per cent over forecasted GDP could spike rates upwards at any time, which would help to cover costs,” said Mikes. “We see this reversal of volume expectations assisting carriers battling against the headwinds of driver shortages, adverse regulations, and cost pressures from 2012 and earlier this year.”

Optimism, however, is tempered by the limited availability of drivers and the impact of HoS rules that take effect July 1, which, says Mikes, will limit asset utilization and raise operating costs.