CSCMP's Supply Chain Quarterly
Logistics
October 17, 2019
Forward Thinking

Trucking fleets seek new strategies in a turbulent age, CSCMP Edge panel says

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Carrier executives share approaches to riding out most volatile market conditions in a decade.

The CEOs of some of North America's largest truck fleets are generating new strategies for coping with some of the industry's most volatile business conditions in a decade, according to a panel discussion held Monday at the CSCMP EDGE 2019 annual meeting in Anaheim.

Volatile conditions peaked in 2018 and the first half of 2019 as driver shortages hit a pinnacle, helping to force trucking rates up to historic highs, Derek Leathers, president of CEO of Werner Enterprises Inc., said in a session titled "A Look Down the Road—Carrier CEOs Speak." In response, many fleets boosted their spending by increasing driver wages and replacing vehicles and technology. That reaction added a wave of excess capacity to the system that soon led to a sharp drop in spot market rates, forcing the bankruptcies of dozens of fleets.

That wild ride is now pushing many trucking lines to look for increased driver productivity in return for their investment in increased pay, said Jim Fields, chief operating officer at Pitt Ohio. "One of the most vulnerable times for small carriers is when things are going pretty well, because their costs are going up," Fields said. "Safety devices are great, but they come at a cost, so companies need to offset that with reduced accident history and insurance rates."

Even if they survive those challenges, trucking companies now face the prospect of keeping a close eye on an array of legislative hot button issues including infrastructure improvement plans and funding, the transition from outmoded AOBRD devices to new ELDs, legalized marijuana and increased drug testing, and a turbulent international trade market, Leathers and Fields said.

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