As with many segments, the vehicle transport market features a few very large carriers serving the big automakers, and a lot of small companies who have found success within a particular niche or geographic area.
But between the fallout from the recession and the emergence of electronic marketplaces, the industry is poised for a reset and there are plenty of opportunities to be had for those carriers willing to use technology to better manage their hard working truck fleets.
The U.S. auto industry collapse five years ago challenged the entire segment and, along with union troubles, brought down some of the leading players. Performance Transportation Services was liquidated, while several of the remaining large transport companies have recently consolidated.
Last September a federal bankruptcy court approved the sale of Allied Systems, the third largest car hauler, to Jack Cooper Transport, the largest, creating a 4,000 truck fleet when the deal gained anti-trust approval. Also at the end of 2013, United Road Services announced the purchase of the Auto Transport Division of Waggoners Trucking, nearly doubling United’s capacity and making it the second largest auto carrier.
At the “50,000-foot level,” vehicle shipping capacity is like most other freight sectors, with the number of haulers holding firm even as load volume recovers, explains Dean Xeros, vice president and general manager of uShip Motors. The key will be for the smaller operators to compete by adapting to the changing automotive environment, and understanding how to use new technology in the evolving marketplace will be critical.
“You’ve got the big getting bigger, that’s to make sure they’ve got the capacity they need,” says Xeros. “But at the end of the day, 70 percent or so of the capacity out there is still run by owner-operators – the guys with four trucks or less.”
Indeed, many owner-operators benefitted from bargain basement buys as large carriers shed their equipment during the downturn, Xeros suggests.
And those owner-ops and small carriers are the ones uShip is looking “to aggregate” in its uShip Motors division as demand increases.
For uShip, it’s important to work with “quality carriers,” those owner-operators with the proper authority, good equipment, and insurance with appropriate limits.
“We really want the guys that run their business the right way,” he says. “We want to make sure that carriers view us as the place not only with quality freight, but as the place to position them as a quality providers of service.”
The current roster of uShip auto transporters features the full range of equipment, from the large 10-car trailers to slant-3s.
Traditionally, car haulers have developed relationships with dealers and with auction lots, and run familiar routes and semi-regular schedules. Otherwise, they look for third party leads.
“It’s very difficult for an owner-operator to find John Q. Public trying to ship a car. Most of these guys don’t have websites or toll free numbers. They really rely on brokers,” he says. “Most of these guys run on a regional basis. Not many do long, national runs because if you’re not familiar with an area it can be difficult to pick up backhaul freight.”
But that model is changing, if uShip and competitors like CentralDispatch.com have anything to do with it.