Freight capacity contracted by a reported five percent in 2008. The major casualties were DHL’s exit from the U.S. domestic small parcel market and the closure of a number of small trucking companies and a few mid sized firms (e.g. Jevic, Alvan). Watch for the speed of consolidation activity to hasten in 2009 as companies find it too difficult to adjust their costs to the declining freight volumes. Watch for some big name players to falter. Look for some companies to withdraw from certain markets and/or restructure to focus their efforts in those areas where they are best able to compete. The LTL sector is particularly vulnerable with their extensive (and expensive) terminal networks as volumes and shipping weights decline.
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