PrivateFleets.com

Recently, I heard about a trend in the transportation industry that indicates a reversal in the growth of for-hire dedicated fleets versus private fleets. The growth of dedicated, for-hire fleets appears to have reached its climax or at least is trickled to a crawl.

 For several years now, the trend has been for shippers to outsource more and more of their transportation to third party logistics (3PL) providers. Very few CFOs like the proposition of buying trucks and building large logistics centers and operations. Even those shippers that have invested in such infrastructure frequently use dedicated carriers to handle a significant portion of their freight.

With this in mind, Jason and I recently spoke with Evan Armstrong, a consultant, to better understand the dynamics of the third-party logistics (3PL) market, including companies that offer dedicated contract carriage. During our conversation, Armstrong said that dedicated transportation has reached maturity. At this point, very few private fleets would replace a sizeable fleet of, say 200 trucks, with a third party. As an example to support this statement, he pointed to recent deals by large dedicated provider Penske reaching outside freight transportation to governments and municipalities for outsourcing fleet operations.

Another interesting issue to watch, although difficult to monitor, is the impact of private fleets on the current driver shortage situation in the trucking industry. Every year, I attend the CCJ Symposium in Tuscaloosa, Ala., a networking and educational conference hosted by my employer, Randall Reilly Publishing. This year, one small carrier said he is facing increased pressure from private fleets in his market for driver recruiting, mentioning that he has recently lost drivers to private fleets in his area offering dedicated runs and better benefits.