Pandemic-Induced Trailer Dislocation Still Hampering US Truckload Carriers

One of the pandemic’s persistent impacts on the truckload market has been a systemic dislocation of trailers, a dynamic that has morphed from a drain on capacity available to shippers at the height of freight demand to a drag on the ability of carriers to service loads in the current market.

Trailer marketplace technology  estimates that as much as 25% of nationwide dry van trailer capacity has been moved outside of its optimal location. That’s largely due to shippers in different sectors slowing down or speeding their shipment velocities, forcing carriers to move trailers farther outside preferred lanes.

Trailers for truckload carriers and shippers is easier said than done. Carriers are often forced to reject loads in favor of collecting empty trailers to pull them back into their normal network.

Resolving the load-repositioning dilemma

One solution to the dilemma of having to choose between repositioning or accepting loads are so-called load-outs, where a carrier agrees to pick up and reposition an empty trailer while simultaneously moving goods from another party. The benefit of load-out moves is they, in effect, reduce the cost to reposition the trailer and move the goods, while enabling greater revenue opportunities for the driver, because he or she is able to get paid for both moving the trailer and the goods.

Load-outs have long existed but have generally been viewed by carriers as a last resort, Redmon said.

The trick to load out is getting enough repositioning opportunities in front of the fleets that need trailers moved. Most fleets run at ratios of one tractor for every two to four trailers. The ones using a larger trailer-to-tractor ratio generally have trailers that are idle in terminal yards or completely orphaned or abandoned.

“If 25% of a fleet’s pool is in the wrong location because they’re chasing freight, the fleet is effectively shrinking even if the economy might be giving them more volume,” said Jim Coffren, chief product officer at vHub. “They can’t reposition their network fast enough. The capacity is there. The issue is how you execute the decision, and that’s what we’re tackling.”

Coffren said the industry sees anywhere from 15 to 25% in empty moves through a combination of authorized bobtail moves, planned and unplanned drop-and-hook empty moves, “and a mysterious number of miles that are unaccounted for.”

With carriers battling diminished demand for freight relative to 2022 and higher operating costs than pre-pandemic, giving them dual streams of revenue helps them offset the fixed costs of ownership with variable operating costs, Redmon said.

“If a driver is getting $2,000 to reposition this trailer along with the freight, you can offset the cost per mile while utilizing a trailer without having to source or finance the assets,” he said. “It can cost carriers upwards of $5,000 to reallocate an asset, and we’re moving trailers from zero to $3,500 depending on the lane and carrier need. The puzzle to solve is operational trailer balance.”

By: Eric Johnson / JOC