Shipping Trends to Watch in 2019
By Gary York Vice President, Global Sales, C.H. Robinson R ecognizing how much the U.S. trucking market can influence transportation budgets is one of the most critical steps to managing spend. Temperature- controlled shipments can be especially affected—both in price and service—as market forces shift across the truckload landscape. Predicting the future for supply chains may be impossible, however certain industry trends can help us forecast and plan. Prepare for whatever 2019 has in store by understanding the major factors influencing today’s market. High demand for fresh food and temperature controlled capacity All industries utilizing cold supply chains currently show growth (e.g., pharmaceutical, frozen, and fresh food). Consumers want fresh food to support healthy lifestyles. A strong economy with low unemployment and increased disposable income helps them make these purchases. This demand for fresh leads to more pressure on temperature controlled capacity than ever. Ongoing battle for capacity amid driver shortage For the time being, increased truckload efficiencies and modal diversification strategies have helped capacity meet demand.
While many companies attempt to expand capacity through new trailer purchases and increasing pools, a driver shortage may hinder their efforts. Between high employment rates that provide attractive, high paying alternative jobs to trucking, and baby boomers looking to retire, the recent incremental growth of the truck driver pool is not enough to meet growing demand— causing a driver shortage. Trucking companies are more selective in relationships These industry pressures, combined with the fragmented nature of the for-hire truckload market, cause the trucking community to be more selective about the freight and customer relationships they seek. The graphic below shows just how fragmented today’s truckload market is. One approach, working with carriers only in the right two segments—carriers with 400+ trucks—means a shipper is accessing less than 1% of available carriers. With 61percent of trucks in the United States currently falling into the owner/operator category (including a large percentage of temperature controlled capacity), gaining and retaining relationships within this majority pool of carriers is critical. But accessing this extensive amount of capacity also means managing dozens to hundreds of relationships. A time-consuming endeavor to be sure. This is where experts like C.H. Robinson 206,667 for-hire motor carriers 1,003,939 truck tractors
51-399 Trucks
1-5 Trucks
6-50 Trucks
400-3,999 Trucks
4000+ Trucks
211,739 Units 21.1%
286,972 Units 28.6%
287,492 Units 28.6%
149,103 Units 14.9%
68,633 Units 6.8%
1,890 Carriers 0.9%
183,916 Carriers 89.0%
20,691 Carriers 10.0%
162 Carriers 0.1%
8 Carriers -----
1 C.H. Robinson 2015 analysis of May 2015 FMCSA’s MCMIS Census Data • Carriers Included: For Hire, USA 48 state, active status updated in 2014 and 2015 • Carriers Excluded: Bus companies, LTL carriers, parcel, government vehicles, private, forwarders and brokers (audit performed on carriers of 500 tractors and greater) © 2017 C.H. Robinson Worldwide, Inc. All rights reserved.
20 Western Grower & Shipper | www.wga.com MARCH | APRIL 2019
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