Executive Briefings

Trucking and Transportation 2014 - And Beyond

Andy Moses, senior vice president of global products with Penske Logistics, talks about the growing popularity of dedicated contract carriage - and offers a frank appraisal of the challenges that shippers and carriers face in today's uncertain economy.

Trucking and Transportation 2014 – And Beyond

Penske is experiencing steady growth in its dedicated contract carriage business, Moses said. Factors include a growing need by shippers for committed capacity, in the face of rising demand uncertainty and operating costs.

Moses sees current capacity issues as an accelerator of Penske’s business, although the carrier is “not immune to challenges.” Like many trucking providers, it continues to have difficulties finding qualified drivers, even though its own turnover rate has been historically low.

The company is primarily a provider of regional dedicated contract carriage services. But its own business model is being challenged by rising operating costs, to the point where it’s no longer economically feasible to move empty trucks on the return leg. That practice contains an “inherent inefficiency,” says Moses.

The solution lies in linking Penske customers to the carrier’s larger network. In the process, the company can bring together complementary shippers that generate freight running in both directions. In addition, Penske has formed a brokerage arm to fill empty miles. Says Moses: “No one’s coming to us and saying, ‘We can get by with less service.’”

Technology can be of significant help in boosting yields. Transportation management is a key focus for Penske, says Moses. The emphasis is on three main areas: optimizing labor, vehicle operations, and freight status data. Increasingly, customers are asking for more accessible sources of information, particularly mobile devices. “The cell phone is a very cost-effective approach,” Moses says.

Penske has also made big strides in monitoring driver behavior and engine diagnostics. All vehicles feature the same system functionality, he says.

To view the video in its entirety, click here

 

Penske is experiencing steady growth in its dedicated contract carriage business, Moses said. Factors include a growing need by shippers for committed capacity, in the face of rising demand uncertainty and operating costs.

Moses sees current capacity issues as an accelerator of Penske’s business, although the carrier is “not immune to challenges.” Like many trucking providers, it continues to have difficulties finding qualified drivers, even though its own turnover rate has been historically low.

The company is primarily a provider of regional dedicated contract carriage services. But its own business model is being challenged by rising operating costs, to the point where it’s no longer economically feasible to move empty trucks on the return leg. That practice contains an “inherent inefficiency,” says Moses.

The solution lies in linking Penske customers to the carrier’s larger network. In the process, the company can bring together complementary shippers that generate freight running in both directions. In addition, Penske has formed a brokerage arm to fill empty miles. Says Moses: “No one’s coming to us and saying, ‘We can get by with less service.’”

Technology can be of significant help in boosting yields. Transportation management is a key focus for Penske, says Moses. The emphasis is on three main areas: optimizing labor, vehicle operations, and freight status data. Increasingly, customers are asking for more accessible sources of information, particularly mobile devices. “The cell phone is a very cost-effective approach,” Moses says.

Penske has also made big strides in monitoring driver behavior and engine diagnostics. All vehicles feature the same system functionality, he says.

To view the video in its entirety, click here

 

Trucking and Transportation 2014 – And Beyond