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ssi-schaefer.com
describes as “the reality of trucking” in
2020:
b Freight volumes aren’t growing, but
they aren’t collapsing.
b Spot rates are down from 2017–18,
but they aren’t really that bad.
b Insurance costs are soaring.
b The ELD (electronic logging device)
mandate certainly has been a challenge,
especially for small carriers.
b Trucking failures are, indeed, above
trend.
b But the number of new entrants is
significant, and lost carriers do not equal
lost capacity.
Not all industry players see a year
of dark clouds on the horizon. Marty
Freeman, executive vice president and
chief operating officer of Thomasville,
North Carolina-based Old Dominion
Freight Line (ODFL), is “very optimistic”
about 2020, citing the ratification of the
USMCA pact, a partial trade agreement
with China, and employment holding
steady.
“We talk to our customers every day
and ask them the same question [about
the outlook for 2020]. We get [answers]
anywhere from flat to 5% to 6% growth,”
he says. Shippers, in ongoing efforts to
manage costs, also continue to seek providers who can service multiple supply
chain needs under one roof, a “one-stop
shop,” notes Freeman. “That helps us
become stickier with customers” by leveraging ODFL’s core LTL services with its
capabilities in truckload brokerage, expedited service, household moves, international forwarding, and port drayage.
“We’re not the cheapest service provider in the LTL stable,” Freeman admits.
“Our value prop is on-time service with
low claims at a fair price.” It’s a strategy
that has delivered the best operating ratio
in the LTL business for a decade.
Satish Jindel, founder and president
of Warrendale, Pennsylvania-based SJ
Consulting Group, also is relatively optimistic. He forecasts LTL carriers, despite
a soft market, securing rate increases
in the 3% to 4% range, while truckload
carriers can expect rate hikes from flat to
2.5%.
He cautions fleets to be prudent about
truck investments, even those intended
as replacements, to avoid worsen-
ing the current oversupply situation.
“You have to realize that when you
add trucks to replace, you are add-
ing to overall market capacity. Used
trucks do not go into a landfill,” he
says. “They stay on the road and go
to smaller carriers who could not
afford to pay the $150,000 cost of a
new truck.”
Jindel also suggests that LTL carriers need to get away from a mindset
he calls “put down the ducky,” a
colorful description for a practice
where operators are “too much in
love with running around town with
