Corporate Fleets Add Capacity With Use of Dedicated Service
This story appears in the Aug. 18 print edition of Transport Topics.
The nation’s largest corporate fleet operators are responding to increased demand for freight hauling by lining up more dedicated hauling capacity, expanding in-house truck fleets and, in some cases, outsourcing transportation services.
Fleet executives and industry experts interviewed for the 2014 Transport Topics Top 100 Private Carriers list said they also are taking steps to meet a growing number of federal regulations by investing in new equipment, expanding driver training and looking more closely at medical conditions.
“We continually review our mix of dedicated contract carriage and adjust the balance as our business needs change,” said Tim Johnson, fleet manager at Praxair Inc., in Danbury, Connecticut.
Praxair added almost 300 tractors to its fleet over the past year and reduced the number of dedicated trucks.
James Donnelly Jr., president of ASL Transportation Group in Williamstown, New Jersey, said he sees a lot more interest by private carriers in using dedicated service to help offset the high cost of compliance with government regulation and truck maintenance, and help alleviate a driver shortage.
Paul Mennard, director of fleet operations for Pepsi Bottling Ventures, said it is getting harder to find drivers due in part to the physical requirements of the job.
Douglas Young, director of transportation for Carpenter Co., said he has problems finding drivers who are willing to load and unload freight.
“Drivers want to work in locations where they only have to drive,” he said.
Officials at PepsiCo Inc. say they are using the delivery fleet to haul food and beverages in an effort to increase PepsiCo’s market share.
“Having both foods and beverages allows us to launch and broadly distribute new, convergent food and beverage products,” Chairman and CEO Indra Nooyi said.
Although PepsiCo has reduced the size of its fleet in recent years, the company retained its No. 1 ranking on the list with 12,132 tractors.
Food service operator Sysco Corp. moved into the No. 2 spot with 7,647 tractors, displacing Coca-Cola Co., which fell to No. 3 with 7,479 tractors.
A proposed merger between Sysco and U.S. Foods (No. 5) is under review by the U.S. Department of Justice.
Another deal in the works involves the sale of Safeway Inc. to Albertsons, a combination that would create the largest grocery fleet in North America.
In the energy services sector, Nabors Industries merged its oil and gas support operations with C&J Energy Services to create a combined fleet of 3,002 tractors and moved up to No. 10 on the TT 100 list from No. 12 a year ago.
