TT Private 100: Some Shippers Expand Fleets Over Concerns About For-Hire Capacity
This story appears in the Aug. 23 print edition of Transport Topics.
Concern about the availability and cost of trucking services is causing some shippers to increase the amount of freight they haul on their own vehicles and find new ways to share freight-hauling capacity with other companies.
The moves come as Wal-Mart Stores Inc. tries to take more control of freight coming into its distribution centers in an effort to squeeze more cost savings from its huge network of suppliers by filling empty trailers and reducing miles traveled.
The push for efficiency is not limited to companies as large as Wal-Mart, with its global sales of $405 billion.
Owens & Minor Inc., Mechanicsville, Va., an $8 billion company that distributes medical and surgical supplies to hospitals and clinics, set up a health-care logistics business in May to help manufacturers of medical devices consolidate outbound shipments to take advantage of lower-cost truckload and rail transportation services.
“We’re bringing consolidation to health care,” said Denise Odenkirk, vice president of OM HealthCare Logistics, who noted that the automotive, consumer packaged goods and electronics industries also have consolidated shipments for many years.
Food and beverage distributors, which operate some of the largest private fleets in the country, also are looking at how they can use their equipment to deliver a broader assortment of products.
Stan Brooks, who is senior director of transportation for Mohawk Industries Inc., a manufacturer of carpet and tile that is based in
Calhoun, Ga., said he tracks all inbound and outbound shipments so that loads can be matched with available equipment from his fleet and from outside carriers.
“Transportation is a core competency,” he said.
While many of the executives interviewed for the 2010 edition of Transport Topics’ Top 100 Private Carriers list said they are trying to improve the efficiency of goods movement, they also are closely watching the ability of for-hire and dedicated carriers to provide additional freight-hauling capacity.
“Capacity is extremely important,” said Larry Ahlers, who is vice president of transportation for Oldcastle Architectural Inc., an Atlanta company that makes paving stones and other materials used in home and road construction. “If you don’t have a truck, you’re not moving anything.”
Results of Transport Topics’ surveys of private and for-hire carriers show a disparity in equipment purchasing plans. Private fleet managers surveyed said they expect to buy an average of 93 tractors in the next 12 months, compared with an average of 94 tractors purchased in the prior 12 months, a drop of less than 1%. A survey of for-hire carrier executives found that companies plan to buy, on average, 114 company tractors in the next 12 months compared with an average of 151 in the prior 12-month period, a decline of 24.5%.
To read more about these developments, turn to the Transport Topics Top 100 Private Carriers section in this edition after p. 18.
(Editor’s note: The TT Private 100 will be posted online in the near future.)
