The Future of Trucking is All About Small Fleets
Contrary to popular belief, when it comes to the trucking industry, bigger isn't always better. With a market value of over $800 billion, trucking is a giant that trumps even the domestic oil, coal, and natural gas sectors combined. Yet this sprawling industry has an interesting quirk: it's proving resistant to the trend of big corporations taking over. In fact, the future of trucking lies in the hands of small, agile fleets. Here's why:
The Deregulation Paradox
In 1980, the Motor Carrier Act deregulated the trucking industry. The general consensus was that this would pave the way for larger companies to take over, pushing smaller fleets out of the market. Instead, the opposite happened. Deregulation opened the floodgates for a myriad of small, often non-unionized fleets, who took the market by storm. These new entrants offered competitive cost structures, rapidly claiming market share and often forcing older, unionized companies into bankruptcy.
The Rise of Freight Brokerages
Freight brokerages have dramatically altered the landscape for small fleets. Back in the day, they were the last resort for shippers. Fast forward to the 2010s, and advancements in technology have made freight brokerages a central player in the industry. They now handle approximately 30% of all truckload freight and collaborate closely with smaller carriers. This has been a game-changer, enabling small fleets to get high-quality freight opportunities without the need for extensive sales teams or technology infrastructure.
Impact of Global Trade
Another factor influencing the rise of small fleets is the emergence of intermodal shipping systems and the expansion of global trade, particularly China's entry into the World Trade Organization. Intermodal systems combine sea, rail, and truck transport to offer a more efficient and cost-effective way of moving goods. As the world continues to grow more connected, the need for versatile and nimble trucking services only increases, benefitting fleets of all sizes.
The Future is Fragmented
If you were expecting a future where a few mega-companies monopolize the trucking industry, think again. The key takeaway from this shift is that small fleets have not only survived but thrived. Their secret sauce? Resilience, adaptability, and a knack for leveraging technology. In an ever-changing landscape influenced by deregulation, technology, and global trade, small fleets are proving that you don't have to be big to succeed—you just have to be smart.
