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Supply Chain ‘Rebalancing’ But Freight Volatility Persists

The underlying issues causing empty miles and unfilled trucks persist even as a balancing supply chain has softened them, reports Transport Topics.

The supply chain slowly getting back to normal after the pandemic has helped reduce empty miles while transportation providers are also pursuing efficiencies more generally, says Ben Cubitt, senior vice president of consulting at Uber Freight.

“But the improvements probably fall into two camps, planned and intentional and they just happen because they happen. If you think about it, networks were really disrupted and it’s taken a long time for the transportation networks to get relatively balanced.”

“Concerts weren’t happening, sporting events weren’t happening. All of that has turned back on so all those lanes are shipping again. And so, people have filled trucks to some varying degree of success with that freight.”

According to one survey cited by TT, only 55% of shippers filled their trucks to capacity last year. The combined unutilized space amounted to one in five truckload shipment moving completely empty. The study pointed to the unfilled space and fees as threatening shipper profitability despite a favorable deflationary market.

“Even in a shipper-friendly freight market, too many businesses are still defaulting to inefficient shipping methods,” Kevin McMaster, vice president of sales and operations at Flock Freight, said. “Regardless of the economic environment, shipping empty trucks is just extremely hard to justify as it pertains to not just simple associated costs, but also with our responsibility to the environment.”

“Truckload shippers filled their trucks slightly more often in 2022 compared to 2021,” McMaster said. “But that was more likely caused by a handful of external factors in the market considering that barely half of them are filling their trailers to full capacity.”

Cubitt noted it’s tough for individual carriers or shippers to make an impact. But he pointed out transportation networks can become more efficient by better leveraging technology and being more collaborative with data.

“Once the networks are back in balance as much as they can be because the gross inefficiencies have been worked out, how do you impact that,” Cubitt said. “I think companies like Uber, because of our scale and technology, because we see a lot of networks, we have a lot of opportunity to impact that and we’re trying to.”

Cubitt warned there is a possibility empty miles could increase in the current environment. There have been indications freight demand is softening so carriers may become more willing to drive further to get a load.

Full story here.

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