Country’s largest carriers outsource more than 40% of contracted freight

Written by CCJ Staff | June 3, 2016  Commercial Carrier Journal

A report released last month by shipper-carrier connection platform LaneAxis concludes roughly 40 percent of freight contracted to the country’s largest carriers is subcontracted to smaller carriers. Freight being outsourced to smaller carriers from their larger counterparts isn’t news to the industry, but LaneAxis says its report reveals the practice is more prevalent than previously thought.

The company’s report indicates that of the 13 publicly traded carriers it studied, 42 percent of freight bookings are eventually pushed to third-party carriers. To determine the 42 percent figure it’s purporting, LaneAxis compared carrier’s freight-derived revenue to so-called “purchased transportation.”

The difference between the two, says LaneAxis, equals the amount of freight outsourced to smaller carriers. LaneAxis looked at financial earnings reports from 13 of the country’s largest trucking companies, finding a combined annual revenue in 2015 of $42.2 billion. Purchased transportation — freight outsourced to smaller carriers, it says — then equaled $17.84 billion, or 42 percent of the total combined annual revenue.

Of the 13 carriers in LaneAxis’ report, some outsource as much as 75 percent (an owner-operator heavy carrier; in line with LaneAxis’ findings), while others outsource less than 1 percent. Though LaneAxis didn’t have data on the carriers (or their size) receiving the subcontracted loads, it estimates most of the freight goes to carriers with six trucks or fewer.

It bases that number on percentage of DOT-registered carriers who report being that size — 97 percent. –

Written by CCJ Staff | June 3, 2016  http://www.ccjdigital.com/report-countrys-largest-carriers-outsource-more-than-40-of-contracted-freight/?utm_source=daily&utm_medium=email&utm_content=06-06-2016&utm_campaign=Commercial%20Carrier%20Journal&ust_id=e061b3e3c810a2fd2f6423c089eea888

 

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