The Changing Economics of Trucking

[ATeam]

Fuel prices have soared in recent years. Truckers pass the costs on to shippers via a fuel surcharge. Shippers suffer a transportation sticker shock of sorts and make changes that are in their best interests. Higher fuel prices prompt them to make changes that would not have been made before. The result is less freight for truckers to haul.

An example of this appeared on the local news the other day. A Coca Cola plant near home changed it's production methods.

Story excerpt:

"The system should pay for itself in about four years. Not because of the cost of plastic, but the cost of fuel.

"'If we ship [the regular size bottle] across the road we need about 8.7 truckloads of these to make one truck load of [the tiny bottles]. So we're basically saving 7-and-a-half trips by sending it in [the regular size bottle] configurations versus [the tiny bottle] configuration,' Matthews said."

Full story

Technology changes affect freight too. Consider the number of flat-screen TV's that can go on a truck compared to the old-style TV's. Computers have gotten smaller. Monitors are smaller. While the number of units sold to customers remains the same, the number of trucks needed to transport them has declined.

This trend toward faster, smaller and cheaper is not new. Just something to keep in mind as we survey the world we live in.

 

[OntarioVanMan]

Well sure Phil....look at the OTR carriers now....way back when I started there was only 40 foot trailers and now we have 53 feet...and then there are doubles and triples...and the drivers don't get anymore pay...and they use less drivers.

 

[highway star]

Things like bigger trailers and more compact packaging are effecting the rate of growth in trucking, but trucking continues to grow as does our population. 25 years ago I rarely had an issue with finding a place to park for the night. Now, it's a pain in the tookus.

 

[ATeam]

You make a good point about population growth.

 

[redytrk]

My crystal ball though chipped and foggy shows more and more freight moving by rail. Growth in the "Logistics Warehouse" concept, and "Just in time" will mean only a few miles from the warehouse.

While this means less and less demand for the OTR trucker, demand for expediter services will stay strong. Freight delayed by the rail system will need to be supplemented.
Faulty parts will need to be replaced fast. A blend of surface and air expediting will make more sense than ever.