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A quarterly report from TAB Bank suggests the trucking industry is strengthening—an early indicator that the economy is also expanding.
“There’s a lot of optimism in the trucking industry right now,” said Curtis Sutherland, director of AR finance operation for TAB Bank. But he said most carriers are still cautiously optimistic because “the pains of the recession are still fresh in everyone’s mind.”
TAB Bank’s summer trucking report details several positive trends. Diesel fuel prices, for example, have fallen from $4.15 per gallon to about $4 in May. And in April monthly truck tonnage increased 6.8 percent over the previous year.
“Trucking companies are more willing to increase rates now,” said Sutherland. The majority of TAB Bank trucking clients reported raising rates in the previous 30 days, and most expected to further raise rates in the next 60 days.
However, most of the carriers are not hiring and don’t expect to hire additional workers in the near future. Those that are looking for drivers are having a difficult time finding “good, steady” drivers, said Sutherland.
He also noted that “there’s still a lot of hesitancy when it comes to making new capital investments.” Even so, many companies are now at a point where they must replace the aging equipment that they hung onto through the recession.
The bank’s index of “Core 25” clients increased revenue 13.7 percent from January to May 2012—the total amount of invoices purchased by TAB Bank for this core client group grew from $84.2 million in $95.7 million in this timeframe.
TAB Bank originated with a focus on the transportation industry, although it now serves several industries, including manufacturing, technology and others. “Our roots are in transportation,” said Sutherland, “so we have a good understanding of the industry and its needs.”
The financial institution provides “working capital solutions” to its clients, he said. “We work with customers that may not have the strongest balance sheet—and we also work with companies that are very strong.”
With assets of more than $900 million, TAB Bank offers accounts receivable financing, asset-based lending, lines of credit, equipment loans, capital equipment lease financing, business accounts and commercial banking services.