DC Velocity - December 2010

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arranging direct or near-direct backhauls because it’s the only way it can deliver quality service while maximizing fleet utilization. “We can’t send a unit and a driver on a three- or four-leg move as we don’t have excess capacity built into our dedicated operations,” he says.

In some cases, shippers themselves get involved in the load matching efforts. RockTenn, which is a Transplace customer, works with the provider to explore what Webb of RockTenn calls “collaborative pop-up fleet opportunities” with other Transplace customers. The strategy, which Webb acknowledges is “non-traditional,” allows RockTenn to increase service and capacity as needed to a specific region. Once demand drops off and capacity isn’t needed, “the fleet can dissolve,” he says.

RockTenn also works with Transplace and other dedicated
carriers to fill the empty miles of other dedicated fleets, Webb
says. “This provides Rock Tenn [with] savings over the current
baseline and allows carriers and [the] shipper with the dedi-
cated fleet to recover [their] cost.”
Greatwide, for its part, has developed two “hybrid” versions
of the traditional dedicated model for customers concerned
about empty backhauls. In one, a shipper pays for all miles
driven, but Greatwide will use its brokerage services to search
for other freight—often not the customer’s freight—to fill
miles that the customer can’t. Greatwide and the customer
then share the revenue and profit from the traffic.

In the second, Greatwide, rather than the shipper, takes on the risk of fulfilling the “empty mile” requirement. The shipper pays a higher rate for the one-way move than it would by using either the traditional model or the first hybrid option; however, it’s off the hook for empty miles obligations.

The second option may sound a lot like traditional truckload service, but Greatwide executives point out that with this arrangement, the shipper still enjoys all the advantages of dedicated service. Richard M. Metzler, Greatwide’s chief commercial officer, adds that the two hybrid services are best suited to shippers with diverse product lines and who need multiple solutions to give them service flexibility at an affordable cost.

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The lure of predictability

For all the providers’ bullish talk, no one expects dedicated’s growth to return to the levels of the heady post-deregulation days of the 1980s when businesses operating private fleets were all too happy to dump their assets, reduce their bloat, and let someone else do the work. Skeptics like consultant Evan Armstrong say that one-way truckload capacity would have to tighten significantly for the dedicated model to gain meaningful traction.

Yet those in the dedicated field believe that for the first time in years, the trends are working in their favor.

“I don’t know of any other way you can lock in three to five years of predictable costs and higher service levels … and take the risk out of what your costs will be,” says Bowman. “You can’t do it in your own private fleet. And you certainly can’t do it in the one-way truckload market. It doesn’t fit every movement, but for the movements it fits, we still think there’s a great market for dedicated.” ;