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The LTL Sector of Trucking
In today’s market of “I want it now”, the LTL sector of trucking will see spectacular growth in 2018. With the demand of wanting more frequent and smaller deliveries, the LTL sector will have to adapt by purchasing different types of equipment and adding expedited and guaranteed services. E-commerce consumers and manufacturers are impacting the LTL industry because of the impatience of consumers who want their products fast and frequently. With that being said, an increase in pricing for LTL may be due to increased regulations, fuel, and shortage of qualified drivers.
Old Dominion Freight Line (ODFL) is adjusting to the trend of smaller, more frequent shipments by adding smaller service centers and hubs across the country. Also, ODFL has seen a big increase in specialized services and consumer household pickup and delivery in last year. According to ODFL, another impact of the e-commerce explosion is increasing the severity of penalties that some retailers impose for late or early shipments. Target and Wal-Mart are tightening deadlines and increasing fines as high as $10,000 for late or early shipments. This will also be a factor for the rise of cost for shippers who use LTL services.
As the economy gets better, LTL shippers and consumers should prepare for rising prices and cost of their products because the capacity will get even worse. According to the chairman of the Shevell Group, parent of the New England Motor Freight (NEMF), Shevell quoted, “I’ve been in this business for 60 years and the only time I’ve seen capacity shortages worse was during World War II”. Shevell also quoted, “Everybody (shippers) better prepare themselves because it’s a new era of doing business,” he told Logistics Management. “You’re not going to be able to beat up their trucking companies any longer because you won’t be able to have any trucks.”
Contributor: Todd McBride
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References:
Schulz, John. “LTL rates seen zooming in excess of 5 percent this year, veteran truckers say - Supply Chain 24/7.” Supply Chain 24 7, www.supplychain247.com/article/ltl_rates_seen_zooming_in_excess_of_5_percent_this_year_veteran_truckers_sa/LTL.
February 18, 2018 | Emma James. “LTL Carriers: E-Commerce Powerhouse.” LTL Carriers: E-Commerce Powerhouse - Inbound Logistics, www.inboundlogistics.com/cms/article/ltl-carriers-ecommerce-powerhouse/.