Technology and the Future of Trucking

Here’s  a great article on the likely impact technology will have on the trucking industry.

http://www.truckinginfo.com/news/news-detail.asp?news_id=73701

Rail Prices Increasing As Well Truckload Prices

http://www.bizjournals.com/jacksonville/blog/trade_trucks_trains/2011/04/rail-and-trucking-costs-will-keep-rising.html

Trucking Outlook Mixed

3 out of 4 trucking companies expect business conditions to improve through the end of 2011 according to this article at Today’s Trucking.

http://www.todaystrucking.com/news.cfm?intDocID=26194

March 2011 was record in truckload freight volumes!

For details check out this article from Sys-Con Magazine.

http://www.sys-con.com/node/1791848

Are carriers already hoarding capacity and firing customers?

At Bounce Logistics, we get to see the ebbs and flows of truckload capacity firsthand. During the low point of the recession less demand for goods of all kinds produced an excess of truckload capacity and ultimately shut down weaker carriers. But now, the pendulum seems to be swinging in favor of carriers to levels not seen since about 2006, and the result is very interesting behavior.

Call it reserving, conserving, withholding or whatever else you wish, some truckload carriers seem to be hoarding capacity from all but their best customers , and seeing an additional 4 to 7 cents per mile doing so, according to Transport Capital Partners, a trucking consulting firm recently cited in a Journal of Commerce article. Simple supply and demand principles guide this behavior called Firing the Customer. A recent poll by TCP shows nearly 40% of carriers do not plan to add any capacity in the next 12 months. The poll also shows that less than 5% of carriers plan to increase capacity by 16% or more in the next 12 months. Simply, it’s more profitable to raise prices for current capacity than to make additional capital investments. And because of the increasing regulatory oversight, many fleets are actually downsizing.

If you work in the transportation industry you likely know about CSA 2010, a new initiative by the Federal Motor Carrier Safety Administration. The purpose of CSA 2010 is to increase safety among motor carriers but the immediate results have been devastating to capacity. Take ABC Trucking (fake name, although real life example). When the new carrier scores were made visible to ABC prior to being made public , the ABC fleet was shown to be deficient in four of the five rated categories. ABC could do two things: terminate the lowest scored drivers from the fleet, or go out of business because customers and brokers won’t risk using them anymore. The choice they made? Let go 100 drivers – out of 300!

Unlike the past when an individual driver’s record did not affect his company’s federal carrier scores nor follow him should he relocate to a new company, a motor carrier’s scores are directly related to the drivers in the fleet. Similar to ABC but from a shipper’s perspective, a large national retailer recently began screening and weeding out risky carriers. Naturally, those fleets losing contracts due to poor CSA score find themselves in a precarious position.

There seems to be a perfect storm of rising fuel prices, falling supply of trucks, and increased federal regulation all of which are beginning to have a dramatic impact on truckload prices. Align yourself with the UN-broker and benefit from our strong carrier relationships and our pulse on the marketplace.

What if my customer calls you direct?

This is a word-for-word email string between one of our inside reps and a customer.

WARNING: Names and locations have been changed to protect the innocent and not tattle on the guilty.

From: Forwarder “Bob”
Date: February 28, 2011 3:12:35 PM EST
To: “Doug Reybuck” <doug.reybuck@bouncelogistics.com>, Forwarder “Bob’s Boss”
Cc: “Someone else at forwarder Bobs office” “Lad Johnson” <lad.johnson@bouncelogistics.com>
Subject: RE: Bounce Logistics

Doug

We appreciate you watching out for us… it does not go un noticed

Rgds,

“bob”

Branch Manager

XXXXXXXXXXX

XXXXXXXXXXX

XXXXXXXXXX

PH(XXXXXXXX)

Fax(XXXXXXXX)

Cell(XXXXXXXX)

From: Doug Reybuck [mailto:doug.reybuck@bouncelogistics.com]
Sent: Monday, February 28, 2011 2:22 PM
To: Forwarder Sue who works for “Bob”
Cc: Subject: Bounce Logistics

Good afternoon “Sue”.

I just spoke with “Bob” in your office about this and I want to let you know as well.

I just received a call from your customer Ray at “disloyal shippers inc”  inquiring about getting a truck from New York.

I told Ray I could not go direct and would have to work thru you.

Just want you to be sure that we do not ever betray a trust with any of our customers.

Call if you have any questions.

Doug @ Bounce

Doug Reybuck

doug.reybuck@bouncelogistics.com
My Group Email: pod1@bouncelogistics.com

Bounce Logistics, Inc | 5838 W Brick Rd | South Bend, IN 46628
direct: (574) 344-4468 office: (877) 245-6397 fax: (574) 243-1584