The shipping industry has gone through a lot in the past few years. As e-commerce has exploded, supply chains have been forced to adapt to the higher demand for shipped goods and the increased expectations for faster shipping times. With demand high, capacities tight, transit times unpredictable, and fuel costs rising, LTL freight shippers and carriers have struggled to adapt to the rapidly changing landscape. However, industry analysts predict that the market will adjust to accommodate the new paradigm. New technologies, automation, new incentives for truckers, and increased competition will eventually bring about equilibrium to the chaotic shipping industry, but it may take some time.
Until then, shippers must get creative and employ new strategies to secure capacity, work around unpredictable transit times, and shoulder high rates in the current market. Because of the versatility of the LTL mode of transportation, more and more shippers are choosing to ship their smaller cargo through LTL freight services in order to keep their supply chains moving and avoid lengthy disruptions. To get some perspective on LTL freight and the state of the shipping industry as a whole, here are a few fun facts about what goes into getting your shipment from the loading dock to its destination.
The average semi-truck gets around 7 miles per gallon. In 2019, commercial trucks consumed 46 billion gallons of diesel and gasoline, with motor carriers spending $112 billion on fuel that year, at an average cost of $3.07 per gallon. Since then, the cost of fuel has nearly doubled, with prices as high as $5.76 per gallon in California. This has created a challenging situation for trucking companies and has resulted in rate increases and fuel costs being passed on to the customer.
While the trucking industry has traditionally been dominated by men, there are an increasing number of female truckers on the road today. Women account for over 230,000 trucking jobs in the United States, and that number is expected to grow as more companies look to expand their fleets and hire new drivers in the coming years.
Originally, rail transport was the preferred shipping method in the continental United States. However, beginning in the 1950s, trucking has come to make up the majority share of freight transportation in the country. Today, trucking moves a staggering 73% of the nation’s freight, over 11 billion tons of goods annually, and the industry is expected to grow even more in the next few years.
Trucks today are much more environmentally conscious than those of the past. Fuel efficiency in newer model trucks is nearly double what it once was, now closer to 9-10 miles per gallon, up from an average of 5 miles per gallon in the 1970s. EPA regulations have cut 95% of emissions from heavy-duty trucks in the last two decades. New technology and cleaner fuel have also lowered the emissions of big rigs significantly. It would take 60 modern trucks using today’s super-clean diesel to equal the emissions of a single truck produced prior to 1988.
Since the concept of supply chain management was first made popular in the factories of Henry Ford, it has become a significant aspect of just about every business in the world today. The logistics industry is massive, with over 9 million people in the U.S depending on it as their primary source of income, and businesses spending around $1.5 trillion on logistical expenses annually. That’s equal to almost 8% of the country’s entire GDP!
With so many factors in play, LTL pricing can be complicated. The three main cost components that drive pricing are:
The cost components can be affected by the characteristics of the freight being transported and the requirements of the shipment. These include:
The LTL freight industry is booming right now and is only expected to grow. The less-than-truckload market is predicted to hit a compound annual growth (CAGR) of 2% over the next five years as demand continues to rise and the industry expands to accommodate it. E-commerce continues to transform the retail landscape, and supply chain strains have placed a heavy demand on the trucking industry to meet the needs of businesses. With the help of technology-focused logistics companies like Koho, the shipping industry is poised to both grow in size and streamline efficiency in order to meet the demands of the changing market.
The shipping industry has gone through a lot in the past few years. As e-commerce has exploded, supply chains have been forced to adapt to the higher demand for shipped goods and the increased expectations for faster shipping times. With demand high, capacities tight, transit times unpredictable, and fuel costs rising, LTL freight shippers and carriers have struggled to adapt to the rapidly changing landscape. However, industry analysts predict that the market will adjust to accommodate the new paradigm. New technologies, automation, new incentives for truckers, and increased competition will eventually bring about equilibrium to the chaotic shipping industry, but it may take some time.
Until then, shippers must get creative and employ new strategies to secure capacity, work around unpredictable transit times, and shoulder high rates in the current market. Because of the versatility of the LTL mode of transportation, more and more shippers are choosing to ship their smaller cargo through LTL freight services in order to keep their supply chains moving and avoid lengthy disruptions. To get some perspective on LTL freight and the state of the shipping industry as a whole, here are a few fun facts about what goes into getting your shipment from the loading dock to its destination.
The average semi-truck gets around 7 miles per gallon. In 2019, commercial trucks consumed 46 billion gallons of diesel and gasoline, with motor carriers spending $112 billion on fuel that year, at an average cost of $3.07 per gallon. Since then, the cost of fuel has nearly doubled, with prices as high as $5.76 per gallon in California. This has created a challenging situation for trucking companies and has resulted in rate increases and fuel costs being passed on to the customer.
While the trucking industry has traditionally been dominated by men, there are an increasing number of female truckers on the road today. Women account for over 230,000 trucking jobs in the United States, and that number is expected to grow as more companies look to expand their fleets and hire new drivers in the coming years.
Originally, rail transport was the preferred shipping method in the continental United States. However, beginning in the 1950s, trucking has come to make up the majority share of freight transportation in the country. Today, trucking moves a staggering 73% of the nation’s freight, over 11 billion tons of goods annually, and the industry is expected to grow even more in the next few years.
Trucks today are much more environmentally conscious than those of the past. Fuel efficiency in newer model trucks is nearly double what it once was, now closer to 9-10 miles per gallon, up from an average of 5 miles per gallon in the 1970s. EPA regulations have cut 95% of emissions from heavy-duty trucks in the last two decades. New technology and cleaner fuel have also lowered the emissions of big rigs significantly. It would take 60 modern trucks using today’s super-clean diesel to equal the emissions of a single truck produced prior to 1988.
Since the concept of supply chain management was first made popular in the factories of Henry Ford, it has become a significant aspect of just about every business in the world today. The logistics industry is massive, with over 9 million people in the U.S depending on it as their primary source of income, and businesses spending around $1.5 trillion on logistical expenses annually. That’s equal to almost 8% of the country’s entire GDP!
With so many factors in play, LTL pricing can be complicated. The three main cost components that drive pricing are:
The cost components can be affected by the characteristics of the freight being transported and the requirements of the shipment. These include:
The LTL freight industry is booming right now and is only expected to grow. The less-than-truckload market is predicted to hit a compound annual growth (CAGR) of 2% over the next five years as demand continues to rise and the industry expands to accommodate it. E-commerce continues to transform the retail landscape, and supply chain strains have placed a heavy demand on the trucking industry to meet the needs of businesses. With the help of technology-focused logistics companies like Koho, the shipping industry is poised to both grow in size and streamline efficiency in order to meet the demands of the changing market.
