Shorter Supply Chains Leading to Fewer Overall Truck Miles, TRB Panelists Say
WASHINGTON — Increasing demand for faster delivery of last-mile goods is leading to tighter supply chains with shorter truck trips, industry officials said at a freight panel.
“It’s not so much a shortening of overall supply chains as the trucking part of the supply chain,” said Stephen Burks, professor of economics and management at the University of Minnesota, who was chairman of the Jan. 12 session at the Transportation Research Board’s annual meeting here.
Odometers are down even as trucking activity increases, said panelist Dan Murray, vice president of the American Transportation Research Institute.
“Declining truck trips is not going to mean any sort of decline in economic activity; it’s going to mean a substantial increase in the number of trucks moving goods, particularly in urban areas for shorter distances,” he said.
Shippers in the third and fourth quarters of last year decreased their use of truck-rail intermodal and moved more to truck, Murray said, adding that 55% or more of truck trips are 50 miles or less.
John Larkin, managing director of transportation and logistics at Stifel, Nicolaus & Co., said that more competitive near-shoring of manufacturing in the United States and Mexico from Asia is adding to more truck movements.
“Some of these movements are raw materials, some are finished products,” he said, adding that U.S. intermodal movements are more east-west while north-south movements are more trucking-oriented.
“There will be a huge demand for local delivery capability,” Larkin said. “Density in neighborhoods is going to be important, [and] it will be interesting to see if UPS and FedEx will be able to offer product to meet this demand.”
He cautioned that is more difficult for trucking companies to generate revenue for shorter-haul moves compared with longhaul.
“All of these megatrends take years to develop,” he said. “We think the biggest opportunities out there exist for regional carriers and bulk carriers.”
