How Do You Plan to Transport Your Goods?
Move items your mind, plan your move military, plan your bus journey
If the current global recession has hit other industries, it is bound
to affect the transportation industry
too. It has not helped matters that newspaper headlines bring depressing
news day in and day out. For instance, the following automobile companies
had drops in sales to quite an extent—Toyota (42%), Chrysler (48%), Ford
(32%) and GM (34%). Of course, Chrysler headed for bankruptcy later on.
Naturally, a controversy has risen regarding the most cost-effective mode
of transportation for delivery of goods. In fact, the Supply Chain Consortium
even conducted a survey regarding this and came up with the conclusion
that rail usage and ship usage might increase, while air freights would
go down. Trucking companies
would have a stabilized business, but not really see either a downward
trend or an upward trend. And the Consortium should know, considering
that they provide the benchmark for the best practices and have more knowledge
than anybody else!
A detailed analysis of the survey revealed the following facts—
(1) Morgan Stanley of Outsourced Logistics (Freight Pulse 15) conveyed
that there would be a 4% increase in rail rates, but for the same volume
of freight. This move by the authorities was related to the fact that
many companies were now eyeing railroads as a more practical means of
transport in comparison to others. After all, the costs would definitely
come down.
(2) Survey respondents dubbed Norfolk Southern as the most dependable
railroad, considering that it was famous for always delivering goods on
time. Naturally, an increase in volume could be expected in this quarter!
Where other railroads were concerned, Morgan Stanley predicted that freight
volumes would drop by around 4% to 5% in 2009.
(3) There is also a proposed merger of Yellow Transportation (YRC Worldwide’s
long-haul network) and Roadway that has created some concern among people.
Feeling that this integration would result in interruptions to service,
at least 14% of those asked revealed that they would take their business
elsewhere, or at least, reduce the volume.
(4) Where LTL (less than truckload) carriers were concerned, ABF, FedEx
and Con-way topped the list of favorites!
(5) Rates for truckloads were predicted to increase by 0.7% (volume =
-1.2%), by 0.6% (volume = -0.3%) for Regional LTL, and by 0.8% (volume
= -.1.9%) for National LTL.
(6) Freight Pulse Survey has given heartening news to trucking companies
and manufacturers. Whether it is truckload or less than truckload, the
rates are predicted to go up by less than one percent. The trucking industry
is supposed to stabilize more quickly than the shipping industry; more
and more freight manufacturers are abandoning freight transportation by
ship in 2009.
(7) True, there are some limitations where truck capacity is concerned—certain
destinations are inaccessible, drivers are not always available for every
region, equipment is not at hand sometimes, and lack of backhaul and empties
returns opportunities. Therefore, a majority of the survey respondents
expressed the view that they were opting for changes in truck
usage. Some were moving from less than truckload to truckload
mode, as this would bring down costs of transportation. Others were pondering
moving
to highly economical but slow railroads.
Whatever mode is chosen, it is hoped that the planned strategies work
for the benefit of all.
