April 24 – The Wall Street Journal reports that faster delivery is Trucking’s New Sales Pitch.Headlined “Trucking Company’s New Sales Pitch: Speed” THE WALL STREET JOURNAL Reporter LORETTA CHAO writes that YRC Worldwide Inc. is the latest trucking company to offer expedited service for e-commerce customers and others willing to pay for faster delivery.
Trucking companies are competing to offer faster delivery as more shippers say they’re willing to pay extra for speedier service.
According to The Wall Street Journal, YRC Worldwide Inc., one of the largest trucking companies in the U.S., announced April 11 it will start offering an “accelerated” service, which shaves a day or two off transit times. The new service is aimed at online retailers and other shippers that need to move goods fast, said YRC Freight President Darren Hawkins. Those customers will pay an average of 15% extra for faster service, he said.
YRC’s move is the latest salvo in an escalating rivalry between the largest companies in the $35.1 billion “less-than-truckload,” or LTL, industry. LTL carriers combine shipments from multiple customers in their trucks. Such companies have strategically-located distribution centers and use proprietary software to map out shipping routes that can serve thousands of shippers while minimizing the number empty trailers on the road.
LTL companies are increasingly under pressure to speed up their delivery times as retailers looking to get goods quickly to online customers force their suppliers to produce and ship goods faster. Meanwhile, the trucking companies are also under pressure from rising labor costs and new regulations.
“It’s the Amazon Prime effect. Everybody believes that everything can be delivered in two days,” said Candace Holowicki, director of global transportation and logistics at TriMas Corp., which ships engineered components to manufacturers. The effect “moves farther and farther up the supply chain, nobody’s immune.”
Ms. Holowicki said she could consider YRC’s new service, but only if it shortens its delivery period by a minimum of two days.
“Before, you could tell a customer the standard delivery is two weeks, and they were fine with it. Now, that’s not acceptable,” she said.
YRC in particular operates in “more the economy market, a slower service than a lot of their competitors,” including FedEx Corp., XPO Logistics Inc., and Old Dominion Freight Line Inc., said Michael Scheid, analyst at SJ Consulting Group Inc. “They’re trying to speed up their service to better compete with those companies.”
Accelerated shipments in YRC’s network will take priority and be loaded onto trucks ahead of standard shipments. But they won’t be delivered at guaranteed times in the same way as its fastest “Time Critical” shipments, which are dispatched as fast as possible, or even by air, to make a delivery deadline.