Supply Chain Optimization

Truck Transportation Costs Likely To Cause Bankruptcies

There are no dominant carriers in the US.  So in tough times, like now, they will scrap for declining volume and…


There are no dominant carriers in the US.  So in tough times, like now, they will scrap for declining volume and keep prices down…this is good for shippers…not good for carriers.  McKinsey did an analysis that shows the depth of the problem (see below) that is directionally correct as everything scales down except fixed costs.  Result = losses.
 
Contrast this with the parcel market.  Prices are going up as volume increases.  There is another pressure on cost:
  • Covid has closed off a lot of business accounts
  • Business deliveries cost a third of the cost of me delivery (Source: Trevor Outman)
The parcel is a disciplined 2-major player market that allows the players to increase cost!