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and having better control over service,” explains Greg
Orr, executive vice president of U.S. truckload operations
for TFI International and president of TFI’s largest North
American truckload unit, Joplin, Mo.-based CFI. “In some
cases, it’s also a more predictable model in terms of cost.”
Orr noted that his company runs both dedicated and for-hire irregular-route truckload
operations for customers.
And dedicated is growing.
“Especially the big retailers
who have a big network footprint and are adding more
and more DCs, it’s shrinking
the length of haul in their
networks,” he says. “A lot of
people are putting eggs in
the [dedicated] basket.” And
while there will always be a
market for long-haul freight,
“to keep drivers, you will see a
lot more push toward regional plays. [Demand for dedicated and private fleets] will absolutely change the complexion
of trucking over the next five years.”
CHANGING FACE OF TRUCKING
The shift is well under way, notes Satish Jindel, president
of SJ Consulting Group. According to his firm’s research,
from 2017 to 2018, there was a 10.4-percent decline in
truck count for one-way truckload for the industry’s top
truckload operators. At the same time, truck count devoted
to dedicated operations rose 6. 6 percent. (See Exhibit 1.)
He cites two truckload carriers to illustrate the trend. “At
U.S. Xpress, the number of trucks in one-way service was
down 6.0 percent, while dedicated was up 10. 7 percent.
Similarly, at Marten Transport, one-way was down 12. 2
percent, but dedicated was up by 28.5 percent,” he says.
“It’s definitely the way the market is evolving, and as [cur-rent economic and market] conditions persist, we won’t see
this trend change for the next two to three years. And we’ll
see some dedicated operations converted to private fleets.
“If you have a large amount
of freight, especially if it is
concentrated, why not manage
it yourself?” Jindel asks.
GOING PRIVATE
Although capacity considerations may be the driving force
behind fleet launches, customer service and cost play into it
as well. “[For private fleets,]
transportation is integral to
the overall view of product
quality and satisfaction,” says
Petty believes that particularly in the ongoing battle for
drivers—which is the real source of the capacity crunch—
private fleets (and to some extent, dedicated contract operations) have a competitive advantage. He notes that private
fleets pay higher wages and benefits. For example, published
reports cite Walmart drivers earning average annual pay of
about $87,500, with some longer-tenured drivers earning
over $100,000. Other industry estimates peg the initial pay
of a long-haul irregular-route commercial carrier driver
One-Way Truckload
Carrier Average Truck Count
2017 2018 %Change
Marten 1,837 1,613 - 12.2%
Schneider 7,930 7,651 - 3.5%
Swift 9,419 7,484 - 20.5%
U.S. Xpress 3,788 3,562 - 6.0%
Universal Truckload Services 1,950 1,787 - 8.4%
Werner 3,483 3,345 - 4.0%
Total 28,407 25,442 - 10.4% Weighted Average
- 9.1% Simple Average
Dedicated Truckload
Average Truck Count
2017 2018 %Change
847 1,088 28.5%
3,930 3,917 -0.3%
3,089 3,058 - 1.0%
2,440 2,701 10.7%
960 1,038 8.1%
3,822 4,277 11.9%
15,088 16,079 6.6% Weighted Average
9.6% Simple Average
SOURCE: COMPANY REPORTS
CHART PREPARED BY SJ CONSULTING GROUP INC.
EXHIBIT 1
One-Way vs. Dedicated Truckload Fleet Growth: 2017 to 2018
