Good News in Trucking means Bad News in Transportation Logistics
What’s the good news and how might it affect your transportation logistics? Here’s the good news part. In the U.S., orders for Class 8 trucks, the heavy trucks that haul freight across the continent and border, more than doubled in May 2018 versus May 2017.
In fact, at 35,200 orders, it was the most sales ever in the month of May. And it’s not an exception. Orders have averaged 40,000 units per month for the past six months. Freight volume was also up 10% in April versus a year ago.
The sales and freight numbers are particularly welcome considering that the truck manufacturing industry endured a ‘trucking recession’ for over a year until April 2017. Truck, rail, and air shipping volumes were at their lowest levels in many years. Class 8 truck orders were slashed. Layoffs were common for truck manufacturers and their suppliers.
Why the Good News Might Be Bad News in Transportation Logistics
Whether your company maintains its own fleet of trucks or uses transportation services, the good news can negatively affect your transportation logistics in many ways.
1. Transportation Logistics Stress
Until a year ago, shipment and freight volumes were at historical lows. But, today there may be an as high demand to make deliveries as there ever has been. Unless your transportation logistics are very flexible, they may be hard-pressed to remain efficient in every scenario.
2. Maintaining Your Fleet
On the heels of an increased demand for trucks, there is increased demand for truck parts and components, which can mean higher repair and maintenance costs.
3. Higher Transportation Costs
While shipping rates were more attractive during the transportation recession, many trucking companies are making up for it now.
The Implication of a Cross-Border Trade War
While this is not part of the good news in the trucking industry, it may certainly complicate your transportation logistics further. It may be impossible to tell what implications tariffs and trade wars will have for cross-border freight. But your transportation logistics should be ready to adjust quickly to any potential scenario.
Want to have transportation logistics that are tailored to your business and agile enough to remain cost-effective in any scenario? Contact PiVal today – your leading third-party logistics company.
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