LOGISTICS INDUSTRY NEWS IN 2 MINUTES: Q2 2019

Only have a few minutes to gain insight into the latest news? Our quick logistics update is perfect for you. 

Tightened Capacity During International Roadcheck Week June 4-6

Each year the Commercial Vehicle Safety Alliance’s (CVSA) conducts a three-day commercial motor vehicle and driver inspection and enforcement event. During this 72-hour period the North American commercial vehicle inspectors perform tens of thousands of intensive 37-step Level 1 inspections on drivers and vehicles. This year, extra emphasis is being placed on steering and suspension systems. Many drivers would rather not deal with these intense inspections and take their trucks off the road causing a capacity crunch during the time period.

  

New Report Finds Trucking Industry Revenues Topped $700 Billion

American Trucking Associations just released the latest edition its annual compilation of trucking industry data – ATA American Trucking Trends  – highlighting the industry’s dominance over the freight market.

Among the findings in this year’s edition of Trends:

  • Trucks moved 10.77 billion tons of freight, 70.2% of all domestic freight tonnage

  • The industry generated $700.1 billion in annual revenue in 2017, 79.3% of the nation’s freight bill

  • The industry moved 69.1% of all trade between the U.S. and Mexico, and 57.7% of Canada-U.S. trade

  • Roughly 7.7 million people were employed in jobs related to trucking activity, including 3.5 million drivers

  • Of those 3.5 million drivers, there were 1.7 million heavy and tractor-trailer drivers. Minorities account for 40.6% of all drivers and 6.2% of truck drivers are women.

 

The TIA Presses Congress For Infrastructure Investments

The Transportation Intermediaries Association will hold their annual 3PL Policy Forum in Washington, D.C., June 11-12 to meet with members of Congress and their staff. They are seeking to rally behind the need to invest in infrastructure and gain commitment from our elected officials to fund projects to improve our roads and bridges.

 

Competitive Market Boosting Driver Pay and Benefit Packages

New data reveals that driver pay has increased with the rising demand for freight transportation services. “This latest survey shows that fleets are reacting to an increasingly tight market for drivers by boosting pay, improving benefit packages and offering other enticements to recruit and retain safe and experienced drivers,” said ATA Chief Economist Bob Costello.

Along with increased pay, Costello said fleets were offering generous signing bonuses and benefit packages to attract and keep drivers. “I expect that trend to continue as demand for trucking services increases as our economy grows.”

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Improving Truck Repair with Prognostic Maintenance

Prognostic maintenance predicts the time a system or a component will no longer perform its intended function. It is based on based on the analysis of failure modes, detection of early signs of wear and aging. As condition-based maintenance is becoming more mainstream for commercial vehicles, experts are seeing a lot of changes to the transportation industry. According to Transport Topics, these changes are transforming the trucking and logistics industry in more ways than one… expanding real-time operational insights, fostering an improved warranty process, and accelerating the sales of replacement parts, just to name a few. Experts says the trucking industry has made a start in the direction of implementing proactive alerts to supplement diagnosis and repairs.

The Transport Topics article references some interesting data from a recent survey of 250 owner-operators and midsize fleets:

  • 33% of the companies reported predictive maintenance was the top technology investment they planned in the next 12 to 24 months

  • 28% reported they expected predictive maintenance and route optimization to be the technology with the biggest impact in the next three years

The advantages of condition-based maintenance for trucking are clear: only those vehicles that can complete the trip are put into service and fewer service failures that can work against the company and their customers. In addition, repairing parts of systems based on need could be much more efficient than over-maintaining according to the calendar or odometer.

Prognostics will not prevent a part from failing, but it could drastically reduce service interruptions or breakdowns. There are still unpredictable variables that cannot be avoided.

Part of what predictive maintenance currently helps with:

  • Oil changes

  • Valve trains

  • Air drier cartridge replacements

  • Diesel particulate cleanings

  • DEF filters

The future of predictive maintenance could help with monitoring and diagnosing in real time:

  • Engine

  • After treatment systems

  • Automated transmissions

  • HVAC systems

  • Low-voltage disconnects

  • Cab components

  • Drivetrain

  • Wheel ends

As technology continues to advance and increasingly complex and expensive equipment is needed to do ever more time-critical jobs, condition-based maintenance will allow fleet owners and managers to get a handle on costs and increase efficiency.

 

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Could Consolidating Logistics Brokers Streamline and Improve Your Freight Processes?

The more complex a company’s transportation network is, the less effective it can become.

Many shippers turn to a broad base of 3PL providers as a solution, but this can result in poor communication, disorganized data, and increased costs. When capacity is an issue, you may decide to reach out to a broad network of brokers to quote your load in hopes that they all have access to different resources. But many brokers have the same resources and this can just create artificial demand.  While using many freight brokers may seem like a way to keep rates low, this disorganized approach could be costing shippers in the long run.

 

Using a lot of different partners can often mean a lot of different systems. Spreading your data across multiple systems inhibits your holistic view of your transportation spend, trends, and opportunities. Without a clear view of all of your data, it becomes impossible to see all the opportunities to match inbound and outbound freight. Missed opportunities means you are spending more time and money than needed. Coordination between multiple 3PLs can be time consuming and often doesn’t garner the results desired. There are ways to aggregate data from multiple brokers, but this can take a lot of time and manpower to implement.  

 

What are the potential benefits of consolidating 3PLs?
Who doesn’t want lower costs, higher transparency, and better visibility and communication? By simplifying your trusted partner line-up, the increased visibility to what is happening with your loads can ultimately generate a more efficient supply chain. Careful evaluation of each 3PL should focus on what value and special services they can provide, not only on price. While price is important, if you are only evaluating the lowest-priced companies, you could likely get poor service full of mistakes. These mistakes can be much more costly to your company in the long run as well as causing you a considerable amount of unnecessary stress. You need partners who are competitive but also trustworthy and able to handle any issues that may arise.

 

Each company is unique, but sometimes consolidation of 3PL providers can prove itself to be the best strategy. Sometimes an interconnected network of brokers will work just as well. Either way, if you can end up with greater visibility into your business and more savings opportunities, it may be worth the culling process. Matching the best teams and technology with your company doesn’t have to be a cumbersome process.

Contact us to see how Trek Freight Services can provide you with the efficient functionality you need.

Logistics Industry News In 2 Minutes: Q1 2019

Only have a few minutes to gain insight into the latest news? Our quick logistics update is perfect for you. 

 

OPTIMISM SURROUNDS TALK OF INFRASTRUCTION ACTION

Momentum and support are building for an infrastructure bill to finally pass. President Trump addressed the need in his State of the Union speech and lobbyists and lawmakers are eager to support this initiative. According to Logistics Management, The U.S. freight system moves 55 million tons of goods daily, worth more than $49 billion and is expected to grow nearly 42 percent by 2040. We can’t delay investing in our infrastructure any more and hopefully this momentum leads to real action.

 

MANUFACTURING IN AMERICA IS GROWING

Manufacturers created a record-breaking 284,000 jobs in 2018, the biggest job growth in the industry since 1997! This growth trend in U.S. manufacturing is encouraging and will hopefully continue in 2019 as well.

 

IMPORTS AND EXPORTS ARE SLOWING

Imports of all goods and services dropped 2.9%, while exports declined 0.6% in November of 2018, according to Transport Topics. This was more than was forecast and was a five-month low. Tariffs are weighing on businesses and affecting pricing as well.

 

TOP RISKS IN 2019 COULD AFFECT SUPPLY CHAIN

The Global Risk Report published by the World Economic Forum identifies trends shaping the global economy. Their recent publication indicated the top 5 risks are extreme weather events, failure of climate-change mitigation and adaptation, natural disasters, data fraud or theft, and cyber-attacks. Supply chains could use this report’s information when assessing and planning for risks that could affect them. 

 

 

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