In their first "think piece" of the new year, the transportation analysts at Stifel, Nicolaus predicted increasing regulations that will constrain capacity increases as we come out of the economic downturn..


"As we contemplate the future, in the third year of the current freight recession (in fact, Stifel Nicolaus says we're currently in a freight depression), we believe that accelerating capacity reductions ... are likely to overshoot even the reduced demands of the leaner and greener supply chain."

So, as the federal government works to jump-start lending, job creation and economic growth, they say, they are inclined to be optimistic about the companies that survive the downturn.

Stifel Nicolaus analysts expect that we will see new, more costly and more restrictive initiatives in the areas of environment, safety and national security. The contested hours of service rules, they believe, may be revised by the new administration. They expect a national speed limit for trucks governed by factory-installed speed limiters, and do not expect that heavier trucks or longer combination vehicles will be allowed.

The net effect of existing and forthcoming regulations, they say, should constrain the capacity available in the freight market, and will exacerbate the capacity crunch that will likely occur as we emerge from the current freight depression, meaning the surviving carriers will be in the cat-bird's seat as far as rates.