Before we look at what truckload capacity might look like in 2011, we need to revisit what has affected the industry to date. During the last three years of economic turmoil, 18 to 20 percent of truckload capacity quietly left the marketplace. The majority of these roughly 400,000 trucks will not return. Add in the additional impact of regulations such as the Comprehensive Safety Act of 2010, upcoming changes in hours-of-services rules and predicted mandates for electronic on-board recorders and shippers and carriers must be concerned with the capacity landscape moving ahead.
With the rebound in manufacturing activity, driver demographics also have re-emerged as a constraint to capacity growth. Coupled with regulatory challenges and stagnant driver wages in recent years, there will be inflationary pressure for driver pay. Many forward-thinking companies did not cut driver pay, reduce miles or equipment speed during the downturn. This foresight now is driving the divergence in business between well-capitalized companies experiencing tonnage growth and many smaller firms experiencing volume contractions.
The industry certainly cannot ignore these convergent factors. The dynamics bode well for intermodal to grow and become a key factor in customers’ networks. Carriers must embrace the changes spreading throughout those supply chains.
At the same time, it’s important to remember that 68 percent of all tonnage in the U.S. moves by truck. That number doesn’t move even in the most aggressive intermodal growth forecasts over the next decade. In fact, conservative forecasts of U.S. freight movement estimate trucking’s market share will surpass 70 percent over the same period.
The key to success for shippers and providers in 2011 and beyond is to operationalize to the most sustainable, mode-neutral solutions. By sharing shipper and carrier network visibility and strengths, and collaborating with asset-backed providers with diverse portfolios, effective network solutions can be achieved. Communication, collaboration and mutual understanding between both parties will drive success.