According to a new report, railroads are positioned to rebound faster than any other mode of shipping, both because of the wide variety of industries it supports and market confidence signaled by recent investments. The less-than-truckload (LTL) market is struggling due to low pricing, but analysts speculate that is a move to weed out the carriers who are barely hanging on. Though the truckload market shows signs of improvement, it continues to be plagued with overcapacity. To combat this, fleets are either removing equipment or choosing not too replace aging vehicles. Significant changes that would affect capacity are not being projected until the end of the third quarter of 2010.

Rail Rebounding Faster Than Truckload, LTL

A new report by Ariba North America, a spend management solution company, speculates that because of the day-to-day survival mode of many carriers, the market remains “shipper friendly.” As a result, shippers should, and will, “continue to look to the carriers that can maintain high levels of customer service and grow their relationship, while carriers must continue to examine their cost model to ensure their sustainability,” the report, written by Rachel Rutkoski, said.

Rutkoski is a senior category manager, transportation and logistics, Ariba North America. In her report, she noted that “activities that typically reflect the health of the transportation industry continue to show that we are moving in the right direction.”

Click here to visit Fleet Owner and read the complete story.