PrivateFleets.com

Gary Petty, CEO of the National Private Truck Council (NPTC), wrote an op-ed piece about the value of private fleets in the August 6, 2007, edition of Transport Topics. His remarks, based on NPTC’s annual Benchmarking Survey, are very revealing as to the strength and viability of private fleets to meet the changing markets of their customers.

Although Petty didn’t mention the number of survey respondents, I know from past experience that the number is significant: between 100 and 200, for sure, to capture a good slice of the market. As with past surveys, the 2007 survey found that the two main values of private fleets continue to be cost-effective transportation and pre-eminent customer service.

Make no mistake about it; Private fleets are niche carriers. They are only part of a best-of-breed transportation solution for a shipper, mixed with dedicated and for-hire carriage. Many for-hire carriers try to position themselves as specialty carriers to sell shippers on their ability to handle freight that other carriers would consider too difficult or unprofitable. The very existence of a private fleet is clear evidence that the shipper found a better way of getting its products to the market safer, faster and in a more reliable and efficient manner than any specialty carrier could offer.

Half of the respondents use their fleet as leverage or a benchmark against for-hire carrier service and pricing, Petty says. Private fleets’ operating costs are generally not as competitive with long-haul carriers. Only 28 percent said that their private fleet provides more cost-effective transportation than would-be providers. It’s not just about cost, however; their on-time performance and responsiveness is without peer.

One interesting trend is that the private fleet length of haul continues to get shorter. The longer the length of haul, the increased utilization makes freight more attractive to for-hire carriers and less of a competitive advantage for private fleets. The average length of haul for all private fleets is 343 miles, Petty says.

Fleets with for-hire authority generally reported running more miles per year than those without. They are also more advanced. Those with authority are twice as likely to be invested in on-board computer technology than those without. One of the most interesting finding is that 85 percent of those with for-hire authority plan to expand their fleet over the next five years.

In other words, private fleet backhaul is alive and well. This is a supply of capacity that is not going away anytime soon. Seventy nine percent of private fleets expect their fleet to handle more freight over the next five years, with average growth estimated at 16%.

Petty concludes with this: “The message is clear that private fleets have responded to dramatic challenges by delivering more value-added, integrated supply chian management and superior customer service at costs generally better than market rates.”