High-Wire Act (page 3)
-- Logistics Management, 9/1/2005
Page 3 of 4
Yet researchers saw big jumps in the percentages of shippers who were planning to expand the ranks of their airfreight and intermodal providers. Last year, 1.2 percent of respondents said they would increase the number of airfreight carriers they used. This year, by contrast, 16.9 percent planned to do so. Similarly, if not quite as dramatically, 8.6 percent of last year's respondents expected to use more intermodal service providers, and 13.9 percent were expecting to do the same in 2005.
Shippers showed little interest in using more national LTL, rail, barge, and parcel carriers, most likely because there is limited market competition in those industry segments.
Last year, it appeared that carrier performance had stumbled after steadily improving for the past decade. This time around, performance stabilized with no significant gains or losses in most categories. One likely reason: After widespread declines in service in 2003 and 2004, many shippers tied their rates to service requirements. As Capgemini's Peter Moore notes, "Without this added 'incentive,' a decline in service from 2004 would have continued as carriers juggled a multitude of issues, from driver shortages to hours-of-service restrictions."
The news wasn't entirely upbeat when it came to equipment availability. When asked what percentage of their requests carriers were able to fill with available equipment, truckload shippers said availability had improved from 90.8 percent in 2004 to 93.5 percent this year. Shippers using national LTL and express package services, however, indicated that it was markedly harder to get the capacity they needed. (See Figure 4.)
The percentage of on-time deliveries for regional LTL carriers slipped very slightly, from 95.5 percent in 2004 to 95.1 percent in 2005. Survey respondents reported only slight improvement for truckload carriers, from 95 percent on time in 2004 to 95.2 percent in 2005. National LTL carriers are meeting their delivery commitments 93.8 percent of the time compared to 92.4 percent last year, according to survey respondents. (See Figure 4 for a breakdown.)
Those variations, however, are so slight that they may not be truly significant. "These small changes are most likely 'noise' in the data rather than real improvements by the carrier base," Karl Manrodt observes.
Some other modes, though, have showed steady improvement. Railroads raised their on-time percentage from 84.1 in 2003, to 85.4 in 2004, and to 88.4 in 2005. Similarly, shippers reported that in 2003 express package carriers delivered 92.3 percent of their goods on time. In 2004 that percentage climbed to 96.3 percent, and this year it reached 97.7 percent.
The picture for freight loss and damage was inconsistent. The average percentage of rail shipments experiencing loss and damage jumped from 2.3 percent in 2004 to 5.6 percent in 2005, while the figures for national LTL increased from 2.6 percent to 3.1 percent. Truckload shippers, however, witnessed a welcome improvement from 3.9 percent last year to 2.2 percent this year. (See Figure 5.)
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