Transportation sector anticipates increase in costs, prices

GE Capital conducted a survey of over 700 CFOs of mid-level companies in different economic sectors during the third quarter of 2012. Amongst the respondents of the transportation sector, they stood out for anticipating higher costs of doing business, and these costs increasing prices in the future.

The average transportation company surveyed had revenues of $13 million and an employee count of 84, on average. The following is amongst the findings of the survey. Unless otherwise noted, data comparisons are being made to the last wave of the GE Capital Mid-Market CFO Survey executed in the first quarter of 2012.

• Current sentiment – Transportation CFOs are more positive about the current state of their industry, the U.S. economy and the global economy.

• Economic growth – 82 percent say the U.S. economy will grow or stay the same over the next 12 months, a decrease of 10 points.

• Company growth – 82 percent of CFOs expect limited to moderate company growth over the next 12 months, down 2 points.

• Revenues – Forty-four percent expect their company's revenues to increase this year compared to last year, down 26 points. 38 percent expect revenues to remain the same, up 15 points.

• Cost structure – Transportation CFOs (65 percent) have the highest expectations across all industries of increasing cost structure (up 5 points).

• Business concerns – Transportation and healthcare CFOs lead all industries (87 percent) regarding concerns about the impact healthcare costs will have on their business over the next 12 months.

• Pricing – Transportation CFOs lead all industries in their plans to raise prices (56 percent).

• Hiring – 79 percent expect to hire in the next 12 months, the most bullish of all industries.

• Equipment – Transportation CFOs lead all industries considering plans for financing for equipment (67 percent, down 1 point).

• Credit availability – Transportation CFOs experienced the largest increase in credit availability across all industries (35 percent cite an increase, up 12 points).

Of questions asked only of transportation respondents, this is what they replied:

• Concerns – 58 percent are most concerned about the impact fuel price volatility will have on their business (down nine points), followed by 56 percent who are most concerned about the impact of safety/truck accidents.

• Regulations – When it comes to the impact of regulations on their business, 52 percent say they are most concerned about hours of service rules, followed by 37 percent who are most concerned about safety rules.

• Business opportunities – In 2012, the greatest business opportunities are increasing average revenue per loaded mile (68 percent, up nine points) and increasing tonnage volume from existing customers (62 percent, up five points).