Supply Chain Optimization

The Future of Brokers and a Railroad

Convoy — out of business.  JB Hunt brokerage is losing money.  Loads posted to the U.S. truckload spot market are down 12.3% from August to September,  leaving demand down 43.4% from September 2022, according to DAT Solutions. Are brokers doomed?  My opinion is “no” —here is why:
  • Truckload transportation is a commodity — One colored truck run by one company is as good as any other colored truck run by another company. (Assuming safety is the same)
  • With the vast majority of trucking companies being small, there needs to be some way to connect shippers and carrier — brokers fill that need
  • While assets add value (e.g. trailer pools), there is no reason for brokers not to have such assets.
New orders for tractors are up to over 30,000, while total van loads from August to September are down 5.7%.  What do carriers know that we all don’t?
Should a City own a Railroad?  A ballot issue next month will determine if the Cincinnati and Southern RR — operated by NorfolkSouthern (NS)  but owned by the city of Cincinnati should be sold to the NS for $1.6 Billion.