Big Shifts Underway in Transportation

Big Shifts Underway in Transportation

Many companies anticipate major increases in rail usage.

"Shipping goods across the U.S. has always had, and will continue to have, shippers scratching their heads over which mode of transportation is the most efficient and cost effective," says Bruce Tompkins, executive director of the Supply Chain Consortium, an organization providing benchmarking and best practices knowledge. Based on a recent study of rail and truck capacity, the Consortium's survey participants expect significant shifts in transportation modes.

Many companies anticipate major increases in rail usage, Tompkins notes. "Parcel shippers should also notice more business coming their way, and companies will begin to increase their use of inbound consolidation as a means of reducing the cost of transportation. On the other hand, the survey reveals that air freight will trend downward, and truck transportation is expected to stabilize, with little movement either way."

A majority of survey respondents are making some level of changes in truck usage, Tompkins reports, either from less-than-truckload (LTL) to the less-expensive truckload mode, or to the even more economical (and of course, slower) railroads. Truck usage is restricted by several factors, he notes, with the main variables impacting truck capacity being: limitations for certain destinations and the backhaul and empties returns opportunities; driver availability in some regions; and equipment availability.

Variables Impacting Truck Capacity (% of Respondents)


Source: Supply Chain Consortium

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