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Despite Slow Start to Year, Demand for Trucking Services Begins to Strengthen, Report Finds

There are strong signs of life in the freight industry following a difficult start to the year due to the Polar Vortex, according to CarrierDirect, which has just released its semiannual domestic freight market perspective.

Despite Slow Start to Year, Demand for Trucking Services Begins to Strengthen, Report Finds

Strong freight levels in Q2 have challenged many trucking companies to develop new plans to cope with increased demand for their services. Meanwhile, the pool of qualified drivers has fallen short of demand and the effects from last year’s FMCSA changes have created new hurdles to overcome.

“Despite the challenges, we’re really seeing the pendulum swing back into favor of the carrier,” said Joel Clum, president of CarrierDirect. “Carriers are now in a place where they are choosing the shippers and 3PLs they want to do business with based on factors that go outside just the amount of freight they offer, looking more towards profitability and how little stress the customer puts on their operations, people and drivers.”

As economic growth continues to put favor back towards transportation providers, CarrierDirect expects trucking companies to seize the opportunity to invest in new technology and pricing changes.

“We’re standing on the edge of a sweeping reform in technology that will allow carriers to operate more efficiently – particularly in LTL – and price their services according to those they provide,” Clum said. “The shippers and 3PLs that aren’t equipped to do business in that environment or aren’t ‘carrier-friendly’ will face a challenging road ahead.”

Some of the trends CarrierDirect expects to play out include:

1.    Web services-enabled dynamic pricing in the less-than-truckload sector that will allow transport companies like Con-way Freight, UPS Freight, FedEx Freight and others to charge more appropriately for their services based on space taken up by shipments and the needs of their networks

2.    Privately held logistics companies like Coyote, FreightQuote and Worldwide Express continuing to set the tone for best practices in the freight brokerage industry

3.    Asset-based trucking companies such as Swift Transportation, Werner and Estes-Express Lines laying the foundation to become leading third-party logistics providers alongside their asset-based divisions

4.    Emergence of new tech-focused entrants to the domestic freight marketplace who are keen to solve “sexy”, data-intensive problems in the antiquated trucking industry

5.    Carriers better utilizing third-party logistics companies who resell less-than-truckload services, such as an Echo Global Logistics, as a complement to their sales force rather than a competitor

The full report is available from the advisory firm's website.

Source: CarrierDirect

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