Tag: Freight Industry

Is It a Match for the Industry and Uber-Like Freight Handling?

Is It a Match for the Industry and Uber-Like Freight Handling?
Is It a Match for the Industry and Uber-Like Freight Handling?

Uber has given a whole new look to personal transportation and food delivery services. Can it do the same for the trucking industry? The answer is not as simple as it may seem.

Trucking Industry Slow to Adapt to New Technology

In 2016 Wallace Lau, industry principal at consulting firm Frost & Sullivan, authored a study called, “Uber for Trucks: Executive Analysis of North American Mobile Based Freight Brokering Market.” Based on $100 million in current revenue, Lau projected an increase to $26.40 billion by 2025.

But today Lau says that adoption of the Uber model is moving more slowly than anticipated due to resistance by the trucking industry. Lau’s updated study is expected to be released this coming fall.

According to Lau, people in the trucking industry are uncertain about whether the Uber model will actually benefit them. Many are reluctant to deviate from their established routines working with traditional freight brokers.

Uber Throws Its Hat into the Ring

All this may be about to change with Uber’s introduction of its own freight app this past May. While there are already several mobile-based freight apps on the market, Lau believes that Uber’s name and reputation will cause the industry to take a closer look at this trend.

Bill Driegert, director of Uber Freight, says their app turns a cumbersome, labor-intensive process into a single click. It also offers transparency for both shipper and receiver.

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Downturn in Freight Trends for 2017 Plague the Logistics Industry

bigdata
Downturn For the Logistics Industry

Thanks to a laundry list of challenges, the trucking industry limped through a major slump in 2016. What factors contributed to shrinking numbers in truckloads and volume, and what does the upcoming year have in store?

Recent Woes of the Trucking Industry

The post-recession period was kind to logistics as increases in disposable income, factory production and cross-border commerce resulted in a steady recovery. But over the last 18 months, declining demand for services has turned normal seasonal patterns into a wildly fluctuating landscape.

Experts point to a nearly perfect storm of adverse conditions affecting the trucking industry:

  • Gross domestic product growth topped out at barely one percent, even lower than the already anemic two percent post-recession recovery rate.
  • Labor conflicts at West Coast ports created a bottleneck that ultimately resulted in excess inventory.
  • Sinking crude oil prices caused a double whammy on industrial production and shipping volumes.
  • In the wake of the recession, many consumers chose to increase savings rather than spending.

Can Logistics Rebound in 2017?

Research company IBISWorld paints a more encouraging picture for 2017, forecasting a 2.4 percent uptick in domestic trucking sales. Much of the optimism arises from companies increasingly implementing just-in-time inventory management, ordering materials more frequently to cut back on storage costs.

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Railway Freight Trains Take a Back Seat to Amtrak in Priority Change

Cargo transportatio with Trains and Railways
Amtrak Puts Freight on the Back Burner

As Amtrak continues efforts to promote railway travel as an attractive alternative to flying, it scored a big regulatory victory this past July. The Safety Transportation Board (STB) issued a reversal on its previous stance concerning a policy change from two proposals that would have favored freight trains.

Passenger Travel vs. Freight Transport: Which Has Priority?

The first proposal would have given railways the leeway to prioritize freight trains over passenger trains. While the STB initially supported the policy, saying Federal law did not explicitly state that passenger trains should be given preference, they have since reconsidered.

Amtrak fought the change on the grounds that it would severely impair their ability to operate on time, since 97 percent of their mileage is run over non-Amtrak railroad tracks. Not surprisingly, rail freight companies disagreed, saying that priority would actually be determined on a case-by-case basis.

With the second proposal, STB issued a change in terms rather than rejecting it outright. Instead of defining “on-time performance” as the point when a train reaches its final destination, it will now be calculated by arrivals at intermediate Amtrak stations.

This may sound like a minor alteration, but it makes a significant impact based on a 2008 law stating that Amtrak can petition STB for investigations and remedies for delays if on-time performance runs at an average of less than 80 percent for two consecutive calendar quarters.

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Rail and Trucking Industries Face Off in Freight Hauling Rate Battle

Unloading big container trucks at warehouse building
The Trucking and Train Industry are at Battle

Price wars are shaking up the shipping industry as rail lines lower prices to keep and attract customers. Following a turbulent 2015 that was impacted by the west coast labor disputes, BNSF and other railways are offering significantly reduced spot rates for 53-foot containers on routes across the country.

JOC.com reports that 17 out of 18 major lanes have roughly 20% lower rates compared to one year ago. Many lanes now cost about $300 less.

These aggressive price reductions have spurred high enough demand that the rail lines may not be able to sustain the competitive advantage. Logistics and investment experts predict that prices will level out, but the rail companies are enjoying the price battle in the meantime.

Rail Freight in 2016

Warehousing and distribution companies looking to take advantage of the rail rate cuts can expect rates to eventually level off or increase. However, the high rates of early 2015 were due in part to port congestion so the rates are likely to stay lower than they were during that time.

For a company switching to rail or increasing their volume of rail freight, new equipment can facilitate the process. A rail cart caddy has the ability to maneuver and move rail cars indoors or outdoors with a battery-powered motor.

One employee can move a rail car at up to 3 miles per hour. The rail cart caddy connects with a coupler and the employee then steers the car with a twist grip handle.

For more info on the rail cart caddy and other material handling solutions for the logistics industry, contact DJ Products.