The recent announcement of Kraft Foods’ decision to liquidate its private fleet notwithstanding, the use of private fleets among food shippers in the US continues to rise. A recent article published in Logistics Management magazine highlights the overall growth of private fleet market, today weighing in at $300 billion annually. The LM article, “Transportation Best Practices: Private Fleet Management – Tailored for Success” confirms some trends we’ve been monitoring here at the Supply Chain Collaborator blog.
Fact 1 – The overall rise of private fleets among US companies
According to the article, three out of every four Class 8 trucks on the road in the US today are from private fleets. While the piece doesn’t call out food shippers as a specific industry, nearly every single example of private fleet users provided in the article is a food shipper; Pepsico, Sysco, Walmart, U.S. Foods, Hunt Brothers Pizza, etc. The National Private Truck Council benchmarking survey is cited as the source of the data revealing that in the short time between 2012 and 2013, private fleets have grown from handling 68% to 78% of all outbound movements and from 31% to 40% for inbound movements.
Fact 2 – Private fleets are more adaptable to increasingly variable operating environments
As we’ve covered in recent posts like this one and others, regulatory mandates like HOS rules and the more recent ELD mandate are more easily absorbed by private fleets than their common carrier counterparts. The LM article corroborates this position.
Fact 3 – Capacity continues to drive the popularity of private fleets
Food shippers and other industries alike continue to suffer the effects of ongoing capacity shortages. It is something we cover heavily here at the Collaborator and it is also a primary theme of the LM article we’re discussing here. Maintaining a private fleet provides shippers a hedge against capacity shortfalls. It also helps reduce empty miles, especially for food shippers who characteristically move private fleet resources between the same farms, production facilities and distribution centers.
We highly recommend you read the Logistics Management article and, while reading, ask yourself the following two, critical questions.
1) If we’re not already leveraging a private or dedicated fleet, will we be considering it soon?
2) How well (if at all) does our TMS solution address the challenges of managing private fleets?