Market: Fast Freight

The Market: Fast Freight


THE WORLDWIDE FAST FREIGHT MARKET

Ferry London

Overview

The United States has the largest economy in the world. Not coincidentally, it also has the largest freight transportation system with an extensive physical network of infrastructure and entities that provides shippers with the following array of options:

• 4 million miles of public roads
• 140,000 miles of railroad tracks operated by freight carriers
• 25,000 miles of navigable waterways
• 9,800 coastal and inland waterway facilities
• 5,200 public-use airports

Third Party Logistics (3PL)

Moving freight in the modern world can be extremely complex. This complexity has given rise to logistics providers that offer customers a range of solutions to this problem, typically integrating warehousing and transportation services that can be scaled and customized to customers’ needs.

The success of these firms, generally referred to as “Third Party Logistics” (3PL) providers, can be seen in the more than US$200 billion a year they generate. (see table on right).

Familiar names like UPS and Fedex dominate the US market while major overseas firms include DHL Supply Chain and DB Schenker (Germany); Kuehne + Nagel and Panalpina (Switzerland); CEVA Logistics and SDV (France); Sinotrans (China); DSV Solutions (Denmark); and Nippon Express (Japan).

Trucking

While some 3PLs own their own transport carriers, e.g. trucks, aircraft, trains, etc., most carriers themselves are independently owned and operated, contracting their services either directly to a client or through a 3PL firm.

In the US, trucking solutions remain the first choice of most shippers, with 70% of all manufactured and retail goods shipped in the US last year transported by truck while generating income totaling $46.2 billion.

Parcel/Fast Freight

While freight had historically been handled by traditional carriers such as ships, aircraft, rail and trucks, Fred Smith’s innovative Fedex revolutionized the industry in the 1970s with his massively disruptive innovation: overnight delivery using intermodal transport systems – in this case trucks and airplanes.

Today, fast freight dominates the global parcel market, with the Top 5 companies generating nearly $223 billion in 2011 (see table on right).

Congestion and Pollution

As mentioned above, trucking remains the shipper’s first choice for transport, but this has led to several problems as well. Increasingly, congestion around both hubs and highways decreases productivity and fuel efficiency not just for the trucking industry but for the nation as a whole.

This congestion leads to higher emissions by all roadway users, exponentially contributing to pollution. Meanwhile, recent studies have revealed a dramatic rise in the number of big rig accidents.

Finally, the wear and tear on the nation’s roads and bridges comes at a time of decreasing funds for their repair.

With an estimated cost of a trillion dollars just to bring the nation’s infrastructure back to par, it’s clear a solution must be found if the US is to keep enjoying the prosperity international trade brings.

Snowbound

Between the vagaries of the weather and ever increasing congestion around transportation hubs, the fast freight business is becoming anything but.

FAST FREIGHT MARKET
SegmentRevenue
3PL Providers216,318,000,000
Trucking Firms46,200,000,000
Parcel Freight Services213,297,000,000
FAST FREIGHT MARKET: Top 25 3PL Operators
RankProviderGross Revenue
US$
1DHL Supply Chain32,160,000,000
2Kuehne + Nagel22,181,000,000
3DB Schenker Logistics20,704,000,000
4Nippon Express20,313,000,000
5C.H. Robinson Worldwide10,336,000,000
6CEVA Logistics9,602,000,000
7UPS Supply Chain Solutions8,923,000,000
8Hyundai GLOVIS8,588,000,000
9DSV8,170,000,000
10Panalpina7,358,000,000
11SDV/Bolloré Logistics
6,785,000,000
12Sinotrans6,769,000,000
13Toll Holdings6,432,000,000
14Expeditors International6,150,000,000
15Dachser5,925,000,000
16Geodis5,890,000,000
17UTi Worldwide4,914,000,000
18Agility4,410,000,000
19Yusen Logistics3,881,000,000
20Hellmann Worldwide 3,593,000,000
21Kintetsu World Express3,321,000,000
22Damco2,752,000,000
23Sankyu2,689,000,000
24Pantos Logistics2,412,000,000
25Kerry Logistics2,060,000,000
Totals216,318,000,000
FAST FREIGHT MARKET : Top 12 Trucking Operators
RankCompanyRevenue
1United Parcel Service24,800,000,000
2Yellow Freight System2,900,000,000
3Schneider2,700,000,000
4Roadway Express2,654,100,000
5Consolidated Freightways2,200,000,000
6Ryder Integrated Logistics2,200,000,000
7RPS1,900,000,000
8J.B. Hunt Transport Services1,842,000,000
9Con-Way Transportation1,684,000,000
10ABF Freight System1,157,000,000
11United Van Lines1,129,000,000
12Overnite Transportation1,033,900,000
Totals46,200,000,000
FAST FREIGHT MARKET : Top 5 Parcel Freight Ops
RankCompanyRevenue
1USPS65,223,000,000
2UPS53,105,000,000
3DHL52,289,000,000
4Schenker50,029,320,000
5Fedex42,680,000,000
Totals213,297,000,000