The truck driver shortage has been the buzz topic in the logistics world in recent years. It’s been fueled by low wages and a variety of other factors. But the main reason is the government’s ELD mandate passed in 2012. It requires all trucks to be equipped with electronic log devices by December 2017. The cost of the equipment is high, and it is expected to significantly reduce driver productivity and output. This is simply because a computer is not as easily fooled as a paper log book. As owner-operators that are trying to start a trucking company, and existing small motor carriers are in the process of applying for motor carrier authority, they are quickly realizing the burden that these new regulations have placed on them.
The temperature controlled trucking market is largely dominated by small fleets and single owner operators who are expected to be hit exceptionally hard. These are the truckers that usually rely on free load boards to show their availability. But fortunately for shippers, a relatively new form of temperature controlled shipping has become more prominent in recent years.
Temperature controlled intermodal has been around for years, but it has not gained as much traction as it’s dry freight counterpart. The primary reasons behind refrigerated intermodal’s dismal growth have been a lack of equipment capacity and poor performance on the railroad’s part. But this has changed in recent years.
Established carriers and new startup companies alike have realized the potential in the temp. controlled intermodal market. They’ve been on massive spending sprees in order to secure the refrigerated container capacity to penetrate the market.
While our railroads have faced some difficulties in recent years, their productivity and reliability has improved greatly over the last thirty years. Trains are longer, heavier and faster. Accidents and claims are down. Shippers can move more freight for less.
A major concern that temperature controlled shippers have had is the in-transit time of intermodal. This is understandable due to the nature of their freight. But intermodal usually only takes a day longer than shipping by truck. This is perfectly acceptable in most cases, and the technology being utilized has only reinforced this idea.
Modern refrigerated containers feature state of the art technology designed to give the shipper a greater peace of mind. GPS technology allows them to track their container 24/7 to make sure it is moving along. They can also remotely monitor the reefer unit’s temperature and fuel levels. Adjustments can be made if needed.
The intermodal providers have also been going to great lengths to ensure their customers are satisfied with the new service. Interchanges between railroads can take up to a day or more. In the nation’s busiest rail hub, Chicago, it can take more than 24 hours for a train to be interchanged and pass through the city. The 3PL’s have taken a proactive approach by transporting the containers across town by truck to save time. While there are added costs, the reduction in transit time makes the service more appealing to the shippers.
Temperature controlled freight seems to be the last market that has been largely untapped by intermodal. Many will speculate that it is poised to see major growth in coming years. As the driver shortage continues, and more government regulations loom, this becomes more apparent. The next major hurdle seems to be the service lanes offered by the railroads. It will be interesting to see how they adapt.