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US Freight Brokers
By: US Freight Brokers
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US FREIGHT BROKERS

Article:  An Overview of the US Ground Transportation Marketplace
By: US Freight Brokers, Copyright 2011


The following concepts are provided for the benefit of non-industry professionals to help create a shared understanding of the transportation marketplace.  Each day, over 300,000 specialized big rig tractor trailers move freight throughout the United States from one destination to another.  There are various types of trailers on the road such as refrigerated (reefer) trailers that carry perishables; flatbed trailers that carry bulky oversized items such lumber, steel, machinery equipment, etc; hazmat trailers and tankers that carrying hazardous materials such as fuel and chemicals; and the most common type, the dry freight trailer and its intermodal (i.e, truck, sea, rail) counterpart, the container.  There is no consistent order or structure of how the supply and demand within the US transportation marketplace is created or filled.  Therefore, US Freight Brokers offers the concept of "US Strategic Trucks" and "US Strategic Freight" to help the reader comprehend the complexity and enormous scale of the US ground transportation marketplace.  To put things into perspective, the total US transportation marketplace generates nearly one trillion dollars annually in revenues, of which US trucking makes up approximately $300 billion.

“US Strategic Trucks” - The Carrier's Challenge

A typical long-haul freight load is hauled an average 500+ miles.  For carriers, the outbound haul known as the outhaul is where they can selectively evaluate a load's profitability prior to accepting a  contract to move it.  However the return haul, known as a back-haul, is harder for the carrier to estimate in advance since in most cases the back-haul is not known until the carrier is near its current load's destination.  It is not unusual for long-haul truckers to have to wait in a location for a few days for an appropriate and profitable back-haul load.  The alternative to waiting is to "dead-head," a trucking term describing when a truck travels without a load, sometimes up to several hundred miles, to meet a new load or to travel home empty.  Therefore, coordinating a well paying back-haul load within a suitable geographic area allows strategic truckers to maximize profitability since trucks that are not hauling freight are still subject to fixed overhead costs (e.g., insurance, medical, licensing fees, etc).   The objective of the strategic trucker is to maximize loads carried while reducing dead-head miles.  Additionally, if a truckers opts to wait for a strategic load, they must also pay out-of-pocket lodging costs, in addition to their fixed over costs.  Hence the carrier's challenge of finding the back-haul load immediately is critical to maximizing profitability, and more importantly, getting back home to family and friends as soon as possible.  To recap, the back-haul load is (a) typically provided by a different shipper, (b) is not known in advance and (c) is identified within what is called the "spot market" created daily. 


“US Strategic Freight” - The Shipper's Challenge


To help explain the concept of the “spot market” think of your favorite retailer and a popular product it carries.  Your retailer will only order replacement inventory when its supply is low, and depending on the season, the amount initially ordered, among various other factors, could mean that replacement inventory could be ordered once a week, once a quarter, or longer depending on consumer demands.  Once an order is placed, the retailer calls the manufacturer (i.e., the shipper) to provide more inventory, then the shipper must locate transportation to move the freight to the retailer just in time for the big sale.  

Now image hundreds of thousands of retailers with similar needs all placing shipping orders each day under similar dynamic conditions.  Witness the birth of a market where finding quality, reliable transportation for shippers to move their freight, and consistent freight for carriers to transport, is a challenge created each day as retailers place shipping orders that didn't exist the previous business day.  

 

US Freight Brokers”

US Freight Brokers helps to locate and identify “US Strategic Trucks” that meet a shipper's specialized hauling requirements. Likewise, US Freight Brokers helps to locate and identify “US Strategic Freight” that matches a carrier's geographic location thereby optimizing a carrier's efficiency and profitability.  For more information visit www.usfreightbrokers.com

US Freight Brokers. Copyright 2011. All Rights Reserved.


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