tranportationreport
BY MARK B. SOLOMON, SENIOR EDITOR
Looking
better all
the time
AS A CONSULTANT TO TRUCKING COMPANIES SINCE
1977, Larry Menaker, who heads a Chicago-based firm that
bears his name, has witnessed much of the industry’s past.
But Menaker says he has also seen the industry’s future.
And it can be summed up in one word: Dedicated.
Menaker’s firm does not focus all its efforts on dedicated
carriage—the practice whereby, as the name implies, a
trucker dedicates equipment and drivers to serving an individual shipper, allowing that customer to lock in rates and
capacity with the carrier for a multi-year period. However,
he is steering many of his trucking clients in that direction.
Menaker predicts that about half of the future opportunities in trucking will emerge from the dedicated space, not
from private fleet operations or from traditional on-demand
service, where a trucker waits for a shipper to call with a load
and dispatches a rig and trailer for a one-way haul.
Converting private fleets and one-way trips to dedicated
service could bring in as much as $80 billion in additional
annual revenue to dedicated carriers, according to Menaker.
Menaker also sends a blunt warning to carriers who now
The dedicated trucking
model looked good a
year ago. With industry
conditions getting tougher,
it looks even better today.
generate more than 90 percent of their traffic from on-demand service: Unless those companies migrate to dedicated carriage, “they will not be in business five years from
now,” he says.
With rising equipment costs, increasingly burdensome
government regulations, and a shrinking pool of qualified
drivers, carriers can ill afford to have resources sitting idle
waiting for a shipper’s call and may not be able to adequately service the customer when the call does come,
Menaker explains.
As a result, those carriers that stick with the on-demand
model may find themselves behind the competitive eight
ball or drowning in red ink, Menaker says. “If you are waiting for someone to get in touch with you, you will be in
trouble,” he says.
DOUBLE-DIGIT SAVINGS
John G. Larkin, lead transport analyst for investment firm
Stifel, Nicolaus & Co., calls dedicated trucking the “
mutually beneficial antidote” for carriers that want to get paid for
