What trucking can learn from the airlines

I was going for the job shopping cart picker upper at walmart but they denied me cause i didnt have a quadruple endorsement on my aarp card...

 

Makes a great blog post. But it leaves out a few facts that are pretty significant. There are only a fraction as many airline choices in the country as there are trucking companies. And in reality only a select few of those airline choices are ever competing against one another for any given customer because only a select few will ever offer service from that customers departure point to their destination.

By comparison in trucking, any given customer has literally hundreds of choices for moving any piece of freight from any one location to any other. For this reason and this reason alone, it is far easier for airlines to implement industry wide changes to the billing model.

If we only had 3 major trucking companies and another dozen or so smaller independent companies and NO freelance options (owner/operators) then I would agree that what works in practice for the airlines might also be able to work in practice for trucking. But we don't have anywhere near those numbers. So if any one company began to charge for something like loads cancelled after driver dispatch, the net result would be lost customers for that company until they either did away with the policy or went belly up. That's just the nature of supply and demand.

Now of course we can alter that supply and demand equation if we make the right regulatory changes. But do we really want an industry where a carrier can't compete for loads going to certain cities because they don't have the capital available to bid the contract for that city? The old adage be careful what you wish for doesn't even begin to cover it.

 

I agree with Flying musician on his opinion. Most if not all the same mistakes the airlines make, the trucking companies do so too. You could look at the two industries and find they are similar in operations, upper level management positions. Could the trucking industry learn from the airline industry??? No. I think the airline industry could learn from the trucking industry.

KH

 

king that's more than just an opinion my friend....i was GM of the 3rd largest cargo ops with limited passenger ops as well on the east coast from the early 90's through last year......i know what the numbers are, what the costs and overhead are, and how it operates behind the scenes having sat in on many many meetings and negotiations on pricing, contracts, both for work and with the unions, and just doing the month to month p&l for those ops......if the good old TWU would budge and give a little there might actually be a little breathing room in the industry's ability to stay solvent, but even as i cut the salary of myself and my management staff by 30% to try and retain our biggest contracts, they were looking for more money and benefits and just didn't get it, even as they saw the company bleeding money and dying a slow death due to excessive labor, benefit, and legacy costs......as a result, we lost our largest contract to a non-union company who undercut us by more than half, and could not stay in business with the remaining contracts we had.....it's an even bigger and more cut-throat world than the trucking industry is.....

it's a wonder any of them are still in business or haven't been bought out by the chinese lol.....

 

I've been following the industry since 96. I personally believe a 70 seat Regional jet and 70 prop will replace the smaller jets. Its just like upgrading your fleet of 48ft trailers to 53's. Many companies want to transport more cargo/passengers. Also, they want more ecofriendly, quieter, and more fuel efficient equipment. At the same time they need it to be reliable.

Why do you think Boeing has produced the 767 for 25yrs. In trucking terms, why do you think Freightliner has produced the Columbia/Century series, KW with the T800/W900 and T600 for a long time. All are reliable and fuel efficent when paired with the right engines.

Now I personally believe AA could have avoided BK just like many other trucking companies and airlines could have too. To me it is all about restructuring, and working together to make the profit needed to run the established business and keep it in the green rather than the red. If there is competition, find your niche. What hurts me the most, is all the employees loose their jobs.

 

This industry is the only one where your customer expects you to do MORE and then do it again for LESS!

Otherwise the guys knocking on their door will take your place.

Then the shipper wants them to do it for less...

Then the next guy comes along thinking he can do it even cheaper...

It is getting to the point where we need to invent 'Robo Driver' and keep the trucks moving 24/7/365 to hopefully break even...

Then someone will invent 'Robo Driver II' and cut the price...

 

Its not a fear, its a fact. Supply and demand is fairly predictable in that way. And that's pretty standard for what can be expected when supply exceeds demand. The airlines avoid this because in their game, supply does not exceed demand.

Well that would certainly help with the supply and demand problem. But like I said earlier, be careful what you wish for.

 

Well actually this is sort of what happens in aviation. And not just in airlines. The aviation equivalent to being an O/O is to be an air charter operator, i.e. air taxi. If you want to obtain an certificate to operate as an air charter, the FAA will look at EVERYTHING. Including telling you that no, you can't buy that airplane to use on your certificate because we don't think it will be profitable enough, you must buy this other airplane or one like it instead or we won't give you authority to operate. Why? Because we said so, that's why. Think we're wrong and want to appeal our decision? Too bad, what we say goes. Again, this cannot be stressed enough, BE CAREFUL WHAT YOU WISH FOR.