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Home » Transport executives to boost capital spending
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Transport executives to boost capital spending

November 12, 2010
Mark B. Solomon
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Executives of 11 truck, rail, and intermodal companies said they plan to boost their 2011 capital expenditures by between 20 and 30 percent as they either replenish their truck fleets or maintain and grow their rail and intermodal networks.

The executives' comments came at Milwaukee-based investment firm Robert W. Baird & Co.'s 40th annual Industrial Conference held earlier this week in Chicago. The conference drew attendees from 108 public companies across multiple sectors of the U.S. economy, including executives from three truckload carriers, three railroads, three less-than-truckload (LTL) carriers, and two intermodal companies. Jon A. Langenfeld, Baird's chief transport analyst, would not identify the companies other than to say both J.B. Hunt Transport Services Inc. and Ryder System Inc. were represented.

Langenfeld said capital expenditures in the truckload and LTL sector are returning to historically normal replenishment levels following capital underinvestment during the past two years. Railroads and intermodal companies will invest to maintain existing systems or expand their networks to accommodate continued robust demand for their services, Langenfeld said.

The companies said they are negotiating higher rates on new and renewed contracts due to stronger demand and the impact of capacity reductions. The trend is likely to continue into 2011, according to the executives.

Companies with broader exposure to industrial end-markets, such as railroads, LTL carriers, and integrators like FedEx Corp. and UPS Inc., are seeing stronger growth and, according to Langenfeld, are "providing more constructive 2011 outlooks" tied to improving industrial production activity.

By contrast, demand for truckload service, which is driven by the consumer and retail end-markets, is expected to weaken in the fourth quarter due to modest consumer spending and a diminished need to replenish inventories, he said.

Transportation Trucking Rail Intermodal
KEYWORDS FedEx J.B. Hunt Ryder UPS
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Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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