Recession Pushes Reinvention for Trucking Industry, Less-than-Truckload Providers Expand into Multimodalism
NEWARK, N.J., Nov. 1, 2010 /PRNewswire/ -- For the highly cyclical less-than-trucking industry the blow of the economic crisis -- the most damaging to trucking since deregulation and the 1980s recession -- meant rock bottom. The key to its survival will be reinvention. To win back nearly $10 billion in lost revenue, LTL carriers are moving beyond pallets and existing domestic networks toward multimodal offerings and global reach.
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In 2009, the top 25 LTL carriers lost 23.8 percent of their revenue, dropping to $25.2 billion after holding steady around $33 billion during the recessionary years of 2006-2008. Redefining what less-than-truckload means will require addressing inventory strategy changes, distribution center repositioning and the increasing overseas origin of goods such as apparel, which, when domestically manufactured, was the lifeblood of LTL.
As shippers become less mode-specific, their carrier expectations are changing.
"It's as much about helping shippers figure out how to move the goods as it is about moving the goods," said UPS Freight President Jack Holmes. "If you are going to be there, you have to do more for the customer. True LTL is still goods the shipper wants moved on a pallet, either multiple goods shrink-wrapped or heavier freight. The issue is, when do those goods mode shift?"
The week's Cover Story in The Journal of Commerce examines the future of this critical trucking sector, the challenges it faces -- including compound annual growth of a mere 2.2 percent in the last 27 years -- and the potential for expansion via partnerships and new technology as well as acquisition.
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Since 1827, The Journal of Commerce has been the most trusted source of intelligence for international logistics executives to help them plan global supply chains and better manage day-to-day transportation of goods and commodities in the United States and internationally.
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SOURCE The Journal of Commerce
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