What are Hostage Trailers?
Simply put, these are semi-trailers that sit idle and underutilized (for months) at shipper distribution centers, fulfillment centers, and warehouses, nationwide. These assets are extremely valuable to the overall supply chain, especially their owners — trucking companies.
Typically, a truckload carrier and its customer — the shipper — will strategize to develop trailer pools for each shipper location.
Trailer Pool: a trailer pool is a group of trailers that a truckload carrier allocates for regular use at shipper distribution centers. Distribution center workers are then able to load and unload these reserved trailers without the carrier being present. This strategy alleviates wait times and allows for efficient operations as freight arrives and departs from the shipper location.
However, day-to-day supply chain disruptions often cause trailer pools to become unbalanced over time, leaving trailers idle and underutilized for days, weeks, and months.
“Trailer availability is the trucking industry’s biggest challenge over the next several quarters, transport CEOs said at the Council of Supply Chain Management Professionals Edge 2021 conference in Atlanta.”^
What Equipment Shortage?
Most logistics professionals are well-versed when it comes to the multitude of issues facing the world’s supply chain. One particular issue among transportation companies happens to be “equipment shortages,” specifically dry van trailer shortages. A few contributing factors to this shortage hypothesis:
- Domestic trailer manufacturers are dependent upon overseas part manufacturers. Overseas part manufacturers are plagued with labor shortages and other supply chain disruptions.
- Dry van trailers are highly sought after in order to transport e-commerce goods.
[ E-Commerce to Hit $4.2 TRILLION in 2021 ].
As a result of this record demand, shippers and trucking companies alike, are desperate for access to dry van trailers.
Another important note: traditional rental-leasing companies haven’t had trailer inventory to rent or lease since early 2020.
Some of the world’s largest fleets however, DO HAVE TRAILERS, they’re just not being properly utilized.
Looking For Dry Vans? They’re Right in Front of Our Eyes
Don’t just take REPOWR’s word for it. Werner Enterprises’ Chairman and CEO, Derek Leathers is one of the industry’s most prized executives.
“It’s not fair to our network of customers if someone’s going to sit on those trailers,” Leathers said at CSCMP in Atlanta.^
Leathers estimated capacity could increase 3% to 4% if trailers were utilized efficiently. He implored shippers to do their best to increase trailer turns, as it’s one of the few solutions to the equipment crunch in the short term.^
However, Werner isn’t the only enterprise-level fleet, struggling with improper trailer utilization. Another prominent CEO, Darren Hawkins of Yellow Corp., outlines the same challenges…
“We do not have access to our own equipment as readily as what we’ve seen in the past,” Hawkins said. “And then when you do get that equipment, it’s in the wrong part of the country and we’re having to reposition it.” — Darren Hawkins (CEO, Yellow Corp.)^^
Here’s where you can take REPOWR’s word for it: we’ve worked with dozens of Werner-sized carriers and all of them are experiencing the exact same issues.
Reflection Point:
If hostage trailers are typical among carriers and shippers nationwide, are we really facing an “equipment shortage?”
If dry van trailer capacity is so scarce, then why aren’t shippers and carriers collaborating to free thousands of those valuable assets being held hostage?
As an industry, we might be contributing to these “equipment shortages” ourselves…
Well, at REPOWR, we’re freeing these hostage trailers and rebalancing dry van capacity to a sustainable level.
#FreeHostageTrailers
Grassroots movements like “FreeTheHops” led to education and legalization of high-gravity (6%+) beer sales. For decades, beer consumers in Alabama had limited options, until networks and communities of brave Alabamians set out to create change.
Similarly, REPOWR is creating change. We’re building a collaborative, digital community of shippers, fleets, 3PL’s, leasing companies and OEM’s to unlock underutilized and available capacity. REPOWR matches underutilized assets with thousands of vetted carriers in need of short-term trailer capacity. Oh, and trailer owners like Werner, Yellow and others actually earn revenue by utilizing REPOWR’s technology to reposition these assets.
Don’t be surprised when you see an I-24 billboard in Chattanooga displaying… #FreeHostageTrailers
Rescued Trailers
Bigger Picture
A problem left unaddressed, snowballs to create an even bigger problem.
Luckily, this particular issue is one that can easily be solved, before the world’s supply chain enters a pandemic of its own.
Since early 2020, communities globally have seen just how vital the supply chain and its transportation companies are. Given the complexity of the world’s supply chain, proper utilization of domestic trailer capacity is a bigger problem than one disruptive company can solve on its own. It’s going to take awareness, collaboration, participation, and action. The crush of goods being shipped isn’t abating and is impairing a timely and efficient flow of goods in this country.
Unused trailers sitting idle widen the gap between equipment supply and equipment demand. It is crucial in times like these that the trucking community takes a closer look at trailer pool networks. Are they being optimally utilized? Could they be used elsewhere? These are questions that both shippers and carriers could benefit from asking.
Takeaways
REPOWR is calling on transportation fleets to collaborate with their shipper-partners. As an industry, we need to be actively monitoring trailer pools and corresponding utilization rates. At REPOWR, we’re partnering with some of the world’s largest fleets to eliminate this equipment-related waste, as its keeping our resilient supply chain from reaching its full potential.
Those that own the equipment, own the market.
& when the wheels aren’t turning, no one’s making money.
Together, let’s address and solve this supposed “equipment shortage.”
Together let’s #FreeHostageTrailers
_______
Onward,
REPOWR Team
Contact Us
spencer@REPOWR.com
REPOWR is a collaborative logistics marketplace and digital-leasing platform for the world’s supply chain.
The company brings visibility and value to over $75B worth of underutilized transportation equipment, by connecting shippers, trucking companies, 3PL’s, leasing companies and OEM’s to a digitally connected, asset-sharing ecosystem.
By digitally matching supply and demand, REPOWR’s automated solution unlocks an Assets-as-a-Service model for its users.
With connected technology, fleets can optimize assets across multiple locations, through shared networks, with trusted partners.
Sources:
^: Shefali Kapalia, Yellow and Werner agree: Trailers are today’s biggest issue in trucking, TransportDive
^^: Todd Maiden, What’s Tougher? Finding Drivers or Trailers?. FreightWaves
