The number of trucking companies that filed for bankruptcy fell to 370 during the second quarter, a 61.9 percent drop from the second quarter of 2008 when it was 970
, according to Avondale Partners' Trucking Failure Report. This is the lowest number of failures the investment banking firm has reported since the first quarter of 2007.

According to the firm, the rate of companies going into bankruptcy is less than 40 percent of what it was in the second quarter of last year, when 46,025 trucks were out of business. When looking at the first half of this year, the number of failures slipped to 850 from 1,905 in the first half of 2008. The number of trucks pulled from capacity fell from 87,995 to 22,095 over the same period.

Despite the hopeful numbers, Managing Director Donald Broughton does not anticipate an improvement in pricing. "Bottom line, this is not a rate sufficient to offset the dramatic drop in demand that started in the fall of 2008, nor is it enough to offer any hope that the weakness in pricing will soon be over," he said.

According to the data, bankruptcies were mostly being filed by smaller companies with longer lengths of haul. The filings were also predominantly among truckload carriers, and the firm attributes this to the growth of this industry and the increased barriers to entry.

The report does not indicate any increased confidence in the trucking industry in the short term, as the firm sees little uptick in demand and little improvement in pricing.

Avondale attributes the decline in failures largely to creditors, who have helped companies stay float. However, the firm doesn't necessarily see this as a good thing.

"Unfortunately, the marketplace can't count on capacity reduction as it has in the past to assist in speeding up the recovery rate of the industry," Broughton said. "Until lenders change their outlook or are forced to change their ways, truckers will be forced to rely solely on a pickup in demand to drive improve industry conditions."

Avondale Partners prepares the quarterly report for the benefit of its institutional investing clients. The firm also sells subscriptions to participants in and suppliers to the industry.

More info: www.avondaleonline.com