Research Shows Top Carriers Outsource Nearly Half Of Freight Shipments

A new study of the nation’s top 50 Carriers (as ranked by Transport Topics) shows that the 13 biggest public companies outsource an average of 42.29% of their freight shipments.

This figure, according to the authors, LaneAxis Virtual Freight Management, “is based on the percentage of total revenue those carriers spent on ‘Purchased Transportation’ – essentially subcontracted freight shipment services.”

“Our findings are clear – many Shippers likely aren’t getting the visibility they think they are,” says Rick Burnett, LaneAxis CEO and Founder. “Large Shippers and Carriers may be able to manage their own fleets effectively, but with so much freight being outsourced to small Carriers with six trucks or less – which is 97% of the trucking industry – that’s a problem. There’s very little visibility into that network.”

The research also revealed that average margin percentage for those carriers (the percent difference between Operating Income and Operating Revenue) is around 8%. So not only are customers likely losing visibility to 42% of their loads, they are likely paying 8% margin for that lost visibility.

Burnett says many Shippers turn to large Carriers, brokers, and third party logistics services (3PLs) to save on costs and hassles, “but often the opposite is happening.”

“We know small Carriers are the backbone of trucking – and that’s a good thing,” adds Burnett. “But many of those Carriers lack the inboard tracking units and back-office technology to deliver real-time visibility to shippers. That often leads to lost loads, inefficiency, and confusion.”

Category: Featured, Management