The Future of Freight
Flash forward five years, and the trucking industry will be a very different beast to what it is today.
“The big carriers are going to get bigger and fewer,” confirms Duff Swain, president of consulting firm Trincon Group, “while the smaller carriers need to get smarter and more niche-driven.”
Swain delivered this news at a recent conference, where he pointed out what most of us already know: the global economic downturn has not only forced us to rethink the way we do business today, but it’s also forced us to re-evaluate how we’ll operate in the future.
According to American Trucking Association (ATA) President Bill Graves, the main concern carriers face today is the increasing influence of the federal Government.
“The policy and regulatory reach of federal government into your businesses will surely increase over the next 5 to 10 years,” Graves said at the ATA’s Annual Management Conference & Exhibition in Las Vegas in October.
“The list of government agencies that now have a role in regulating your business reads like alphabet soup.”
To survive and thrive in the challenging and evolving freight market, he recommends that carriers initiate a strategic overhaul of their operating procedures – pronto.
“Whether you were running one truck or 10,000 trucks, figuring out how to manage almost $5 [per gallon] fuel was the difference between staying in or going out of business. Now that prices have subsided and are holding reasonably steady, the application of those lessons learned should continue to produce tangible financial benefits,” he explains.
For instance, carriers should consider investing in specialized software such as Telogis GPS Fleet Management Software, which assists with fuel management. The average OnTrack (now Telogis Fleet) customer reports a 10-15% reduction of their annual fuel bill, as well as savings and higher efficiency across areas such as insurance, safety compliance, risk management and customer service.
Truckers also need to figure out how to cope with rising costs across critical areas such as equipment and technology, by working out a way to run fewer vehicles in a more productive and profitable way.
“Change is difficult at any moment, but it will be especially challenging for this industry in this transformational time,” Graves says.
“The question is not whether you’re able to adapt to this ever-more-complicated, increasingly intrusive operating environment. Your failure to do so simply means you cease to exist as a transportation enterprise.
“The question is how you’re able to deal with these myriad government mandates – and still find some enjoyment in running your business, provide quality service to your customers and, heaven forbid, make enough profit to make it worth your while.”