Some of the most successful fleets today are not from conventional trucking companies or common carriers.   They can be found operating as private carriers for some of the largest, most successful companies in the U.S.  This is especially impressive because these companies are not necessarily transportation focused.  Their private fleet is the means of transporting products to customers.  The Top 100 Private Fleets of 2016 - according to Transport Topics can be found here.  

Thousands of trucking companies available; why privatize?

The main reasons companies opt to start their own fleet are:

  • guaranteed capacity – no more excuses from common carriers
  • enhanced customer service – a third party carrier will not typically perform at the highest level
  • scheduling flexibility – there are predictable cycles for each company; complete control of staffing helps reduce labor costs and increase efficiency

If you examine the top 100 private fleets, you will notice that a majority of them are from the food and beverage industry.  The grocery retailers face extreme challenges each day as many of their products have a very limited shelf life and their stores need continuous resupply.    With so much on the line in this hyper-competitive sector, companies must have transportation assets dedicated to their operation only. 

The energy sector is also highly represented on the top 100 of private fleets.  Their need for specialized equipment does not allow service by common carriers.  The transport of industrial gases, providing of oilfield services and the deployment of assets in support of military operations cannot be adequately accommodated by conventional common carriers.  It is for this reason that private fleets are the norm for these specialized niches.

Private Fleets are the Quiet Majority

According to the National Private Truck Council (NPTC), private motor carrier fleets account for approximately 82 percent of the medium and heavy-duty trucks registered in the United States;  they travel approximately 53 percent of all the U.S. miles traveled for medium and heavy-duty trucks; and consist of slightly more than two million vehicles. Consequently, private fleets comprise the largest segment of the trucking industry.

The retention rates for private carriers are considerably better than those of the long-haul common carriers.  According to NPTC, private fleet turnover is 14 % per year versus the industry average of 97% that truckload carriers struggle with.  The large disparity in driver turnover between private fleets and truckload common carriers is one possible reason why private fleet performance is better. 

If a company is not getting the kind of service that is required from common carriers, then they should consider starting their own private fleet.  Various truck leasing companies can help specify, order and lease the right equipment for the job.  They can also perform the maintenance and offer bulk fueling in order to start a new fleet off on the right foot. It will not be easy, but with the help of leasing companies and industry organizations like the aforementioned NPTC, the way forward can be made simpler. 

 

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To me - the big advantage is the retention rate.

July 12, 2017 4:01:02 AM

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About Joey Slaughter

Joey Slaughter is the owner of Blue Ridge Transport, LLC. Joey has been in the trucking industry since 1992.

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