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DSC keynote: Autonomous transport will spawn massive truckload consolidation

Bloomberg’s Klaskow said reduced need for drivers eventually will leave a few big truckers standing

Lee Klaskow (r) tells Craig Fuller that autonomy will have widespread impact (Photo: FreightWaves)

An inevitable shift to autonomous transportation will, at some point, trigger massive consolidation among U.S. truckload carriers, reshape the rivalry between trucking and railroading, and rationalize the transactional and relationship roles played by freight brokers, a leading analyst said Wednesday in a keynote address during FreightWaves’ Domestic Supply Chain Summit.  

Lee Klaskow, senior analyst of transportation and logistics at Bloomberg Intelligence, said the autonomous trucking evolution will likely leave standing about half a dozen very large carriers, a 360-degree change from an industry that has long been extremely fragmented.

The low barrier to driver entry props up capacity and makes it difficult, if not impossible, for the truckload industry to consolidate, Klaskow told FreightWaves CEO Craig Fuller during the summit kickoff. Autonomous transport will remove that prop as the reliance on drivers begins to diminish, he said, adding that absent the driver pillar, the truckload ecosystem will, over time, coalesce around a relatively small group of powerful providers.

Autonomy will have a knock-on effect in other modes, according to Klaskow. Should rail labor feel threatened by truckers gaining substantial market share due to the shrinking cost differential between the modes, it may agree to deploying more autonomous locomotives in order to remain competitive with trucks, he said.


Brokers have used technological advancements to become more efficient and productive, Klaskow said. This has enabled brokers to add value to their shipper, trucker and driver stakeholders. The question may become to what extent brokers’ value propositions will be affected, if at all, should fewer drivers be part of the equation.

AVs to trigger massive truckload consolidation, Klaskow says

Such profound changes will take many years to play out, Klaskow said. In the meantime, the industry has to grapple with what is in front of it, namely a dearth of qualified drivers, ongoing congestion problems at key seaports and historically high freight rates across multiple modes. On a year-over-year basis, shippers will see some rate relief in 2022 over the extreme conditions of 2021. However, rates will remain elevated for some quarters to come as network fluidity slowly gets restored, Klaskow predicted. 

Motor carriers will still struggle to find and retain drivers, Klaskow said. Truckload carriers looking to tamp down costs and remain as nimble as possible will rely even more on owner-operators and less on company drivers and will continue to explore diversification strategies such as penetrating the LTL sector through acquisitions.

Congestion issues will plague the maritime sector, and shippers will deal with a carrier sector that has the leverage of consolidation and is more disciplined about pricing its capacity, Klaskow predicted. That said, box rates have likely seen their high-water mark for the near to intermediate term. Rates will start “stairstepping lower” after the Lunar New Year and continue to back off, he predicted. By 2024, with equilibrium restored to the ocean lanes and with rates falling to historically accustomed levels, the industry may enjoy a collective laugh over the hand-wringing that went on three years prior, he said.


Still, the current rate cycle will be more prolonged than what folks are used to, Klaskow said. “We’re not saying that this time is different,” he said. “What we are saying is that this time is longer.”

Truckload rates in 2022 should rise by mid- to high-single digits as demand remains brisk and capacity tight, he said. Wild cards for next year include the potential for more coronavirus variants restricting the labor supply; the impact of compliance with the federal government’s drug and alcohol clearinghouse rules on driver availability; and the possibility that provisions in the recently signed infrastructure law will spur increases in construction demand and put strains on flatbed capacity. The $1.2 trillion law represents a win-win for railroads and truckers, with both modes to be increasingly called upon to support demand for construction orders, he said.

LTL rates next year should rise in the mid-single-digit range, with rail rates increasing by the low- to mid-single digits, Klaskow said.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.