Truck Topics

The future of cargo vans in expediting Part II

The cargo van has long been a staple of most expedited carriers' fleets.  In fact, there are many who would submit that expediting, at least in its early days, grew through the use of the cargo van.

There seems to be however, a growing concern among some cargo van owner/operators that their vehicle of choice is on a path to extinction, or, at least the amount of cargo van freight will be dramatically reduced. 

This topic is one that has been highlighted in previous articles.  In April 2000, Expediters Online.com presented an article, "The future of vans in expediting", which addressed the same concerns of today's owner/operators.

At that time, three of the four expediting carriers surveyed said that vans definitely would be part of the expediting picture for some time to come.

The reasons those three gave for the continued use of vans included:

"Many of our customers prefer vans."

"It's difficult at times to recruit enough "D" units, so vans will be in this industry for some time to come."

"Vans have a competitive advantage in expediting with lower cost of operation, currently few regulations, etc."

"I think "B" units are an important asset to our company and the industry. Approximately 40% of our loads are van size, that's why 35% - 40% of our fleet is that size unit."

The only dissenting voice was that of a southern-based expedited carrier: "Unfortunately, vans appear to be in the process of being phased out. Some companies are eliminating the "B" units in favor of the straight trucks. We are not currently adding vans to our fleet. However, an alternative to the traditional van might be contractors with cube vans. This allows them the opportunity to haul the low weight, bulk freight that vans are too small for."

Today

Now, let's fast forward to comments from today's owner/operators on the Expediter Forums or in correspondence we have received:

 - "Every expedite company I have contacted so far recommends getting a straight truck but says that a van would be fine if I only want to net $25,000.00 to $30,000.00 a year. They all claimed I could net double that with a straight truck and (they) claim to get 30% more load requests for straight trucks."

- "I drive a straight truck (D Unit) but I have many friends with vans. None of them are making money. One to two runs a week maybe grossing $5-600 seems to be the norm.  "... Rates of $25-30,000 appears to be right on the money, or should I say lack of money."

 - "I've been expediting for 6 years in a cargo van and it's gotten progressively worse every year.  Sometimes I don't even get my first run of the week till Tuesday or Wednesday, and that's even in the good months.  A few years back, I could make about 40K for a year, but now I'm lucky to do 30K."

 - "It goes without saying you can get more in a straight truck or a big truck than in a van. Therefore if you owned the company, whom do you want to keep around (even though vans most likely made that company)?"

"That's right straight trucks and big trucks. How do you keep them around, you give them one or two skids that maybe, repeat maybe should have gone a van instead, in lieu of them having to sit around."

 - "In my opinion, as sad as it is, most companies running just-in time freight are better off with D & E units, than with vans."

Despite the perception of reduced freight for vans, some expediters are happy with their choice of vehicle size:

 - "I, too, am running a van, and yes, I'm making in a month what I used to make in a week. I can only say I'm very happy I made the decision to start with the van and not the straight truck, I'm saving about a grand a month in truck payment and if this fails, I can used the van as a way to my next job.  I can't speak for everyone but the van was the right choice for me."

 - "B units will always be an important part of this business. One of the problems is that it is very much easier to purchase a van than a "C" or "D".  Financing and down payments are much easier, therefore recruiters are able to have a glut of "B"units at any point in time."

 - "I would have to call the B trucks as alive and well as the rest of us (in straight trucks), except with our higher "nuts" called truck payments, taxes, fuel, etc., we sometimes have to take some loads that in good times we would reject. The "B" trucks have an advantage here because their nut is smaller and the fuel economy is better."

Overview

We're all familiar with the reasons for the popularity of cargo van operation - lower purchase price and cost of operation, less governmental regulation including the maintenance of logs and hours of service restrictions, drivability, etc.

The cargo van, however, may be a victim of its popularity.  As one expedited carrier puts it, because a cargo van is the vehicle of choice for so many, this results in vans flooding the market and putting those owner/operators at a numerical disadvantage; too many vans for diminishing freight.  As a result, the vans are usually the primary vehicle-size to be "frozen" in recruiting efforts.

From the customers' side: a shipper can pack a lot of small parts on 1 or 2 skids.  Some expedited customers prefer vans because of perceived value; in spite of freight size-based tariffs, some customers are hesitant to have a larger truck transport their van-sized freight.

Loading and unloading times are usually faster with a van, and more often than not; vans have the speed limit advantage on the highway. This has resulted in the customer's perception that a van means a faster delivery.

One truckload carrier representative with a background in expediting says, "It probably surprises no one that the straight trucks stand a better chance of staying loaded and busy.  Sure, vans have an important history in expediting; some would claim that the industry was built on the cargo van."

"I think that's a somewhat cloudy look back, we had the smaller straight trucks back in the early days of expediting as well.  If vans don't have the same level of freight or revenue as 5 or 10 years ago, one can attribute that to a changing economy, shippers and industry competition.  It's all market-driven; if the expediting carriers get customer requests for nothing but cargo vans, that's the size of trucks they will populate their fleets with."

So, what's the future of cargo vans in expediting?

The comments by van owner/operators demonstrate that their revenue has been impacted over the last few years, but also, that some have determined that the smaller sized unit is still the best choice for their situation.

From the carriers' perspective, it seems that it's a mixed bag as well.  As the responses below indicate, there is a wide variance between expedited carriers regarding cargo van freight levels and the van's place in their segment of expediting.

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Cal Pettrey, Owner
C&M Transport, Inc.

"We run a number of cargo vans; both the conventional 3/4 - 1 ton vans and cube vans that we use like a van or small straight truck.  As a matter of fact, we currently have more vans in the fleet than ever before and have been keeping them very busy.  The question of a van not being dock high is rarely a problem unless it's an automotive load and the plant will not unload a non-dock high truck."

"There are still a lot of drivers who want to own and operate a van for the obvious reasons."

"It seems that van freight will be either busy or dead; this time of year is usually slow, but right now, we're running our vans all over with long-mileage loads."

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Mick Thiel - Recruiting Director
Diamond Delivery Express

"Vans have a role in expediting - Diamond Delivery has a substantial number of vans in the fleet.  Of course, we are seeing the typical seasonal slowdown at the moment, but there seems to be sufficient van-sized freight to keep our owner/operators busy."

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Jeff Curry, VP of Business Development
Express-1

"I think that the prevailing wisdom is that when the economy is hot, there is more of a need for vans.  Our cargo vans have been fairly busy even in a soft economy." 

"At Express-1, the Freightliner Sprinters experienced a sudden surge in popularity about a year ago, and now Sprinters account for approximately 35% of our cargo van fleet.  We pay the Sprinters a higher rate because they can sometimes carry 50% more freight than a typical cargo van." 

"That expanded cargo capacity and their fuel economy seems to be a big selling point with the Sprinter owner/operators."

"The dock high issue does arise at times, mainly with the automotive freight."
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Rick Renner - Managing Director, Recruiting
FedEx Custom Critical

"Cargo van freight has been somewhat reduced with fewer small just-in-time shipments available.  Shippers are trying to achieve a better return on investment and have been increasing the size of their shipments."

"I firmly believe that the "D" size unit is the backbone of the expediting industry and I can not stress enough just how versatile that size truck is.  We are also seeing an increase in requests for dock-high trucks."

"We try not to recruit vans unless we see an up trend in freight for that size vehicle because we try to protect our current van fleet by not overstaffing."
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Chris Shepherd, VP
Hollingsworth Expedited Lane Partners (HELP)

"In the last year, most customers are requesting vans, I think there's a great future for vans because of the lower pricing for that size truck."

"In a lot of cases, critical shipments can fit on the smaller size trucks.  We have no problem keeping vans busy, actually a large portion of our fleet is cargo vans.

"In the auto industry with union rules, sometimes a dock high truck is needed.  In every case that I can think of, it's an automotive load where the dock high issue comes up.  We have seen situations that require cross-docking from a van to a straight truck for the actual delivery."
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Darin Mark - Director of Recruiting
Landstar Express America

"In the past, cargo vans occupied a significant position in the expedited business; over the last few years, shippers have up-sized their expedited loads."

"There will always be a place for vans in this business, but the decline in van freight is market-driven because the shippers prefer to maximize their shipping dollar."  
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Jeff Brown - Contractor Support and Development
Panther II Transportation, Inc.

"I think there will be a place for them because of the contractors who enjoy the non-regulation of hours of service inherent in a van.  I believe there will always be van-sized freight, and the pricing structure is already in place for vans, so cargo vans have a definite niche.  I don't see them as being a large revenue producer for the owner/operator, however."

"Another reason for the cargo van's popularity is that financing is easier to secure for a cargo van that the larger trucks. The lenders are not as stringent in financing the van because they don't take into account the potential of that size truck.  I would recommend caution in purchasing a van; it's easy to acquire a van, but it's tougher to get rid of one."
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Greg Feeny - Recruiting
Thompson Emergency Freight

There is a future for the cargo vans, but I think we are one of the few companies recruiting that size truck. Many owner/operators tend to believe in vans due to the economic reasons of lower cost to purchase and maintain that size, but they tend to flood the market.  They need to understand that they are putting their lower initial investment above all else and ignoring the fact that they will be competing with many other vans." 

"I feel the Sprinter van is a wise choice for the van owner/operator; it's larger, carries more freight, it fills a niche."
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Ken Rideout
Tri-State Expedited Service, Inc.

"Shippers have gotten smarter; the cargo van loads have gone towards a more traditional means of shipping, like the package delivery companies.  It seems that van freight started dying about a year ago."

"The customers appear to be seeing more value with larger loads hauled on the larger sized trucks and we have more shippers requesting dock-high vehicles."

"We value our owner/operators, and to ensure their survival in the business, we'd like to see them upgrade to a straight truck."

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Chris Morey, Recruiting Director
Try Hours

"Vans are still a viable asset to Try Hours.  I've been in this business for 13 years, and I believe that cargo vans will have a place in expediting for some time to come. If any vehicle type of size is experiencing reduced need, it's the cube vans, and that's because they are not dock high."

"I don't think shipping 1 or 2 skids will ever go away, because customers don't want to waste money putting the van-size shipment on a 24 foot truck."

Lisa Brooks contributed to this article.