We’ve all seen it, the truckload landscape is changing. As the Panama Canal expansion continues to make its impact felt, intermodal is playing a much larger role. These market changes are redefining long-haul operations for many a carrier.
And while these changes won’t have hugely disruptive impacts on long-haul, at least to the extent they are on last-mile, they will continue to remake the sector. These changes echo what happened in the early 1980s after the trucking sector was deregulated.
Back in those days a number of small, single truck operations turned into some of the mega-carriers we see today. These fleets now form the backbone of today’s long-haul operations, while less-than-truckload fleets deliver loads on regional and shorter hauls.
Still, as intermodal shifts and changes in transportation logistics shape the market, another player impacting how freight gets delivered are the shippers themselves. The fact is, shippers are becoming more demanding of the carriers they work with.
Technology is Changing the Game
As technology changes how sellers interact with customers, shippers are redesigning their supply change requirements. Products need to get to market faster and loads need to be moved more intelligently. This means supply chains are becoming more complex, with distribution points popping up everywhere, leaving truckload carriers to sort out how they can best get items from Point A to Point B.
Leveraging real-time data has enabled retailers to monitor shopping habits and track individual interest across a number of channels. As industry players achieve greater insights into stock levels, there’s a far higher level of shipping participation going on.
What’s the moral of the story here? Freight increasingly needs to move from its point of origin to the distribution center, store and home in increasingly different patterns and methods. Let’s take a look at each of these patterns and methods one-by-one.
Changes in Intermodal
As we hear more about how the Internet of Tings (IoT) is changing one industry after another, trucking is not immune. What this means is that freight is far more visible throughout the supply chain, from the point of origination to the last mile.
Interconnected intermodal transport networks and information-sharing options help generate more revenue per mile and offer importers, shippers, exporters and carriers increased benefits, thanks to the data deluge.
One area where intermodal shows a key strength is in the ability double-stack containers on trains. At distances of 500 miles or more, transport by rail in a double stacked container offers a significant fuel advantage over trucks.
With the recent expansion of the Panama Canal, it is estimated that up to 10 percent of marine container traffic coming from East Asia could be shifted away from West Coast ports to East Coast ports. Some say this shift could happen by as soon as 2020. What kind of impact will this have on cross-country deliveries? Right now the jury is still out on that question.
Trucking Becomes More Regional
If there is one bright spot that industry players are finding in all of this change, it’s that suppliers are moving their supply chain operations towards a more local, puddle jumping cycle. They want to be closer to their customer and more responsive to their needs.
Of course, many operators are finding plenty of opportunity here. Truckload carriers are now more engaged in shorter and regional hauls. Others are setting up efficient hub-and-spoke operations or switching from assigning individuals truck drivers to a vehicle to utilizing more slipseat setups.
In the end, the overarching point is that the way freight is getting delivered is changing. As the truckload sector continues to evolve, expect it to look completely different within the next ten to twenty years than it does today, and according to some, that may not be such a bad thing.