US truckers need to change, structurally
In his recent diagnosis of the state of the US trucking industry, American Trucking Associations (ATA) chief economist Bob Costello brought up a factor rarely mentioned in the discussion over the plight of truckload operators: loss of traffic to private truck fleets.
“One of the reasons why freight hasn’t recovered as much is because private fleets have taken some of the share, which by the way, has not happened in a very long time,” he told the ATA Management Conference and Exhibition this month.
To boost network utilisation, some shippers have been courting others to give them their traffic. Arguably the most aggressive has been Walmart, which launched several initiatives to draw in shipments from other sellers. Having established its fulfilment service in 2020, the retailing giant has increasingly opened its logistics infrastructure to online merchants.
In August, Walmart announced it was inviting e-commerce firms to use its ocean shipping infrastructure to move merchandise from China to the US. Walmart Cross Border is a port-to-door service, where shipments are fed into Walmart’s US fulfilment network at the port.
Notwithstanding misgivings about handing freight and data to large competitors, such offerings have resonated with shippers and private fleets have been growing. According to a survey last year by the National Private Truck Council (NPTC), outbound shipments handled by private fleets rose to 75%, the highest in the survey’s history.
On the basis of Federal Motor Carrier Safety Administration Numbers, the NPTC counted 940,280 registered private fleets last year, compared with 1.08 million for-hire carriers, about 90% of which operate fleets of 20 trucks or fewer.
Walmart’s operation probably puts it in the top five of US trucking firms, said Satish Jindel, founder and president of ShipMatrix and SJ Consulting Group.
The challenges of the pandemic convinced many cargo owners of the need to secure access to capacity at affordable cost. Apart from a rise in private fleets, this led to the emergence of collaborative schemes for shippers to pool traffic.
