Shipping Outlook: All Trucked Up
January 16, 2018
Buckle up, because the carriers that deliver your highly anticipated packages are in for a bumpy ride this year. Leaders in the supply chain industry recently sat down for a chat about the future of freight and discussed some long-seated issues that will affect how packages make their way to your doorstep. While the solution might be a bit more complex than changing a simple flat tire, there is a light at the end of the tunnel.
1) More Packages, Fewer Trucks and Drivers
It’s no secret that carriers are, and have been, facing a shortage of drivers (just look at the back of any UPS or FedEx truck for the “we’re hiring” sign). During the 2008 recession, many carriers downsized out of necessity, and staff and fleet numbers still haven’t recovered a decade later.
That’s spelling major trouble as more and more packages get sent every year, and it’s only getting worse. To put things in perspective, in 2014 the amount of packages sent pushed carriers 24% over capacity, meaning timely deliveries were a significant challenge. This year we’re facing a load that’s up to 42% over capacity. In short, “We’re looking at what’s shaping up to be a capacity crunch like we’ve never seen,” says Mike Regan, Co-Founder of TranzAct Technologies, Inc.
2) More LTL Shipments
Less-than-truckload (LTL) shipping is all about small freight. When you order a couple of books or a video game from Amazon, it gets placed on a relatively small vehicle and is delivered alongside other small, light items to your neighborhood. While those packages may not take up a lot of room, every inch of the truck that isn’t filled means lost revenue for the carrier.
The challenge LTL carriers are facing is one of maximizing the space within their vehicles. “We sell space,” explains Estes Express Lines President Rob Estes. “We cube out long before we weigh out,” meaning inefficient packaging can do a lot of harm to the well-oiled LTL system. The ease of online shopping is a major factor in the future of delivery, and retailers will have to step their game up to avoid snags in logistics.
3) The Silver Lining
It’s not all doom and gloom for carriers as we look forward, thankfully, and packaging companies are hard at work to make things easier for our friends in freight. Derek Leathers, the CEO of Werner Enterprises, says that advancements in packaging allowed them “to do more with less as an industry.” As packaging companies begin to focus on dimensional weight as well as physical weight, carriers are starting to see opportunities to fill trucks with more packages than ever before.
The ideal future for the industry? A larger amount of more efficiently packaged boxes loaded onto fewer trucks driven by fewer drivers. Now that’s a scenario we can get behind, and Ernest happens to have just the app to help you start moving toward that future!