A couple of weeks ago, I wrote an article titled "Your cost of living - how much is due to shipping and storage?" In it, I noted that over 9% of US GDP was tied up in moving and storing goods for sale.
Yesterday, I came across this report. It adds another dimension to the problem.
As many as three-and-a-half billion hours of US trucking could be unproductive, according to Uber Freight.
The trucking platform estimates that between 20% and 35% of the 175bn miles the US trucking industry clocks up in a year are likely driven empty – this is almost double traditional estimates.
Uber Freight’s analysts reckon more than half of these empty miles could be eliminated, resulting in lower costs and a massive reduction in greenhouse gas emissions.
. . .
Uber Freight’s own calculations, which are based on annual truck volume and average length of haul, point to as much as 35% of mileage spent without loads, much of this associated with moves to pick up loads.
Mr Danaf suggested 64% of empty miles could be cut out, which would translate into a 23% reduction of overall truck mileage in the US.
In addition to bringing down costs for truckers and their customers, this would also reduce road congestion and fatal accidents and bring down greenhouse gas emissions. On average, trucks drive 5.5 times more miles than light-duty vehicles, and they make up 9% of all vehicles involved in accidents, according to Mr Danaf. The impact on pollution would be substantial, as freight trucking accounts for 7% of US greenhouse gas emissions, he added.
There's more at the link.
That's a pretty frightening statistic, because truck owners have to recover those costs from their customers. They can't carry them uncompensated, because if they tried, they'd go out of business. What that means is that those "35% of mileage spent without loads" is being paid for by you and I, as part of the cost of everything we buy.
That's a heck of an incentive to trucking companies to reduce such "loadless" costs, for the sake of their own bottom line; and it's a heck of an incentive for us to encourage that, because it would translate in lower prices for the things we buy every day. It would also, as the article points out, reduce traffic accidents and other "necessary evils" of our transport network. The sooner the better, as far as I'm concerned!
Peter
15 comments:
That is an observation from a m.
ile high and almost totalitarian viewpoint.
Trucks delivering inputs to manufacturing plants often leave empty, as the output requires different liading capabilities.
Addotionally, LTL trucking rarely runs full trucks, but carries things vitally necessary but too large for parcel delivery services.
This also presumes that the drivers are all willing to work as loaders or delivery people. Many are not.
Recall the drop in demand during the WuFlu shutdowns, and the high demand after.
John in Indy
Rand McNally is also in the same business, even more so than providing charting. I wonder what they'd have to say on this subject.
Now, Uber, do the scheduled airlines. Good luck!
(maniacal laughter follows)
Agree with Anonymous of 12:58.
One could achieve a high "efficiency", but at the expense of flexibility. Railways are more efficient carrying cargo, but their Achilles's heel is the lack of flexibility, so when flexibility is more important, road transport wins.
My BS meter pegged reading that article. Do the authors *really* think trucking companies don't want to maximize their revenue miles and reduce deadhead runs to a few as possible?
The only way I see they could reduce deadhead loads as much as they propose is by having a Central Trucking Dispatch Agency assigning loads to all the smaller truckers out there. Kind of hard to do when a company contracts with a specific trucker to move a load.
Big Brother drools over being able to cut off food deliveries to Red areas with a swipe of a mouse, or even better just put all those destinations at the bottom of the priority list.
12:58 has it down. Written from an ivory tower perspective.
Trust me, Truckers prefer to not deadhead. But it can often be difficult to find a load going the other way, or to find a short haul from your drop off location to the next place you pick up. Remember, most independents use a load broker, and they work for a fee, so that is also a cost.
Trucking firms with established routes will often take a load on their return route that just meets their costs simply for efficiency...but the issue is finding one. If you deliver, say, widgets to Omaha from Chicago, then you have to find a company shipping thingamabobs back to Chicago...or find a three way route that at least pays for the cost per mile.
If the folks at Uber think that everyone is just trying to lose money on those deadhead portions of the route they are idiots. No one tries to do that, it is simply the way things sometimes work out. You'll notice that the authors tell us of the issue but offer no real solutions.
Aside from differing truck requirements for different loads, there is timing--getting the load where you want it WHEN you want it there--and of course, the question of 'whose customer is it?' simply can NOT be ignored, nor easily overcome.
John in Indy has it: ivory-tower eggheads don't really get it.
And realize that a lot of big companies are nothing more than huge trucking companies with a storefront attached. Walmart ... has its own huge trucking fleet dedicated to their stores. Amazon is not much different.
They have their own fleets in order to make sure they support their own stores. They are unlikely to want to lose that fleet dedication aspect in order to haul goods for competitors.
As always it's important to note that rail shipping is more efficient than over-the-road and sea shipping even more so.
Multimodal shipping is still the most efficient way to do things, but only on paper. In reality, a true multi-modal efficient shipping system would require nationalization because our rail system is already close to saturated and meaningful expansion would mean displacing land owners.
Short sea shipping would also work, were coastwise container ships rain liner services up and down the US Coasts and up the Mississippi. Since most US shipyards are either foreign owned or American Owned but 100% engaged with naval shipbuilding (some are foreign owned but only build for the navy too), there's no incentive for foreign companies to engage in the type of financing and building efficiencies that dominate leading shipyards globally, however. Our shipyards can't access most financing or build as fast or as well as Korean, Japanese or Chinese shipyards, so short-sea shipping is unlikely.
Yeah, invisible hand will work best in this situation. Think of fuel tanker, leaves depot full and may just deliver to one gas station. Has to return empty. Some with bulk material carriers.
Reducing no load trips would require significant cooperation between competition. Not something likely to happen voluntarily. It would also take a significant investment in communication and coordination hardware and software. Companies must be incentivizred to do this...the environment isn't a good enough reason for most executives.
It's better than it once was.
Back in the '70s in "Economics of Regulation" class, I remember the professor saying "with a budget of only $23 million, the Interstate Commerce Commission does $2-$3 BILLION damage to the economy [by mandating empty backhauls]. Gentlemen? That is cost efficiency!"
Most trucking companies utilize GPS tracking and software to manage loads, routes, and fuel costs. They rely heavily on this to reduce, as much as possible, running their trucks empty or deadheading back to the distribution center.
Unfortunately, no system is perfect; the goal is to maximize efficiency within the system you have. Since truck lines are independent businesses (not to mention independent owner-operators), they cannot cooperate without likely violating anti-trust laws.
That's there's no centralized load distribution company that works across all these businesses to maximize load efficiency. If there were, that company could control who gets loads and who does not, and they would quickly "own the trucking business due their market monopoly.
Unfortunately, unless you want a nationalized common carrier (and we all know that would be a total disaster, like the Postal Service), all you can do is try to minimize inefficiencies where you can.
I would add that the supply system is a chain, not a circle. At some point the truck is going to be empty. This number is likely inflated by bulk, liquid, machinery, and construction, raw material shipments - which, as prevously noted are handled very differantly.
A dump truck is either arriving empty or leaving empty, the same for a cement truck. I would have to look at the data to really commpent beyond that.
I run CDL Hot Shot There are certain destinations that is an automatic deadhead to get out of. Anything south of Tampa FL and almost anything going to Texas and Colorado. Unless I have a backhaul I figure for a deadhead return. A year and a half ago I was getting loads between Atlanta, Greenville, and Savannah on an almost daily basis. Those loads have disappeared.
I work at a Farmer's Co-op. We're a trucking company with big bins. All of our incoming loads are from farmers, they leave empty. All of our outgoing loads will return empty. That's just the way our business works, there are no options for return loads, especially with food-grade products.
Our fuel delivery trucks leave full but return empty after making multiple stops, not sure how they'd work that into their equation.
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