3 Reasons Why a Harsh Winter Won’t Impact Shipping Capacity Like Last Year

If you put stock in such things, the Farmer’s Almanac predicts this coming winter will be as bad as or worse than last year’s.  Everyone in the transportation industry remembers how bad things got last winter as storm after giant storm bore down on the East coast sending snow as far south as Louisiana.  And who could forget the ominously named, “Polar Vortex” which channeled subzero arctic blasts well below their native latitudes.  The resulting disruptions from inclement weather and deep frozen equipment helped exacerbate already tight capacity challenges for shippers.  Is the shipping industry in for a repeat as winter looms large on the horizon?While this blogger believes the predictions of the almanac for a brutal reprise of last winter, I am less inclined to expect that transportation will suffer to the same extent again.  There are several reasons for my optimism.

Reason 1: New Hours of Service are now simply Hours of Service

I agree with Marc Solomon, senior editor at DCVelocity who points out that the new FMCSA hours of service rules had just been rolled out in the early parts of 2014.  January and February 2014 were fraught with uncertainty surrounding whether or not an injunction would bring an eleventh hour reprieve from the new regulations.  At once, it became clear no such stay of execution was imminent forcing carriers and fleet operators to rejigger their well-established schedules and resource allocations.  This coming winter, adjustments and re-jiggerings will be long since accomplished and the impact on capacity the HOS made last year will not be nearly as pronounced.

Reason 2: Increasing Use of Private Fleets and Multimodal

Logistics Management Magazine says, “The private fleet market share of all outbound freight has jumped markedly in recent years. According to a new benchmarking survey by the National Private Truck Council (NPTC), private fleets captured a 78 percent share of all outbound movements in 2013, up 10 percent from 2012.”  With 3 out of every 4 class 4 through class 8 trucks on the road today being part of a private fleet, it is clear that large volume shippers have been taking steps to exert more control over capacity and avoid being left to the whims of the spot market in a tight capacity environment.  Similarly, as we’ve written about before, advances in accessibility for multimodal shipping have opened these lanes to previously unserved shipping markets.

Reason 3: Increasing Use of TMS Software Among All Varieties of Shippers

Gartner research confirms what TMS providers have known anecdotally for some time – TMS adoption continues to grow.  The advent of SaaS TMS solutions has lowered the barriers to entry for shippers in the mid-market, enabling thousands more organizations to tap these powerful tools for planning and scheduling.  In doing so, shippers have been able to better approximate their needs and secure shipping capacity well enough in advance.

Altogether, these three factors will keep January, February and March of 2015 from being as painful as they were in 2014.

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