Why capacity crunches don’t mean guaranteed cash for transportation providers
Headlines
Maritime bottlenecks continue, with shipping delays being seen at the Panama Canal as demand for container ships, liquified natural gas and liquefied petroleum gas surges.
Shippers are seeing issues on land as well, with drivers reporting significant shortages of places to park their trucks.
Anthony Smith says that big rig parking is something people “don’t generally think about unless you’re part of this space.”
Zach Strickland highlights driver safety, rig security and space availability as things to consider when developing more parking space for truck drivers.
He also says safe parking is key to attracting a diverse driver base, including women.
While drivers are seeing issues, carriers are having a great year, with profits surging.
Smith and Strickland discuss a Wall Street Journal article about UPS enacting shipping limits on some retailers like Nike in an attempt to slow the e-commerce boom.
Making money in transportation
Strickland and Smith go in depth about carrier operating ratios and how the type of freight hauled affects the money carriers can make.
They talk about how tightening markets can determine how much money is made on the dollar for carriers and how fuel costs impact their margins; just because capacity is tight does not mean carriers will see massive profits.
Strickland points out the vast difference in rail, maritime or over-the-road carriers, especially when it comes to competition of moving freight.
He says of the hundreds of thousands of owner-operators across the country, “93% of them have less than 20 trucks.”
This intense competition makes it even more crucial for companies and drivers to understand where they can trim inefficiencies to maximize profits and actually make money.
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