• ITVI.USA
    9,157.620
    -27.560
    -0.3%
  • OTRI.USA
    2.590
    -0.020
    -0.8%
  • OTVI.USA
    9,162.320
    -26.570
    -0.3%
  • TLT.USA
    2.670
    -0.010
    -0.4%
  • TSTOPVRPM.DALLAX
    1.230
    -0.070
    -5.4%
  • TSTOPVRPM.PHLCHI
    1.100
    -0.030
    -2.7%
  • TSTOPVRPM.CHIATL
    1.290
    -0.060
    -4.4%
  • TSTOPVRPM.LAXSEA
    1.700
    0.130
    8.3%
  • TSTOPVRPM.ATLPHL
    1.520
    0.060
    4.1%
  • TSTOPVRPM.LAXDAL
    1.120
    -0.030
    -2.6%
  • WAIT.USA
    139.000
    -12.000
    -7.9%
  • ITVI.USA
    9,157.620
    -27.560
    -0.3%
  • OTRI.USA
    2.590
    -0.020
    -0.8%
  • OTVI.USA
    9,162.320
    -26.570
    -0.3%
  • TLT.USA
    2.670
    -0.010
    -0.4%
  • TSTOPVRPM.DALLAX
    1.230
    -0.070
    -5.4%
  • TSTOPVRPM.PHLCHI
    1.100
    -0.030
    -2.7%
  • TSTOPVRPM.CHIATL
    1.290
    -0.060
    -4.4%
  • TSTOPVRPM.LAXSEA
    1.700
    0.130
    8.3%
  • TSTOPVRPM.ATLPHL
    1.520
    0.060
    4.1%
  • TSTOPVRPM.LAXDAL
    1.120
    -0.030
    -2.6%
  • WAIT.USA
    139.000
    -12.000
    -7.9%
BusinessEquipmentNewsTrucking

Five reasons why flatbed shipping is on the rise

This article reviews the recent past (pre-coronavirus) and hopefully looks into the near-future (post-coronavirus).

In recent years, the flatbed freight sector has seen a massive increase in demand. It’s so high that at times, trucking companies have had to delay shipments and deliver slower performance – they’re inundated with orders.

This growth happens despite a plateau in other areas of freight, where in some cases shipments have declined. One group of carriers, 31 in total, saw an 18.9% revenue boost – to $8.8 billion in 2018, up from $7.4 billion just the year before.

The question is, why is this happening? What factors and trends have led to the upswing in flatbed demand?

Flatbed truck hauling a load on the highway with hills in the background.
(Photo credit: Jim Allen/FreightWaves)

Why flatbed freight?

Before exploring the reasons why flatbed freight and shipment options are on the rise, it makes sense to consider why a party would choose it over other shipping and transport opportunities.

Flatbeds, contrary to general opinion, come in several different forms and they’re available across the four major shipping methods – namely, ground, rail, ocean and air. They’re not all necessarily the type of elongated truckbeds that many are used to seeing on highways and public roads. There are also containers, including refrigerated options, trailers, train cars and much more.

Flatbeds are generally used when material loads are bulky and too difficult to lift without heavy machinery. That may or may not include construction materials such as wood, steel, masonry and more.

The stored goods may also be difficult to access, making it challenging to retrieve through conventional means. That also means certain products may only be transported using flatbed options – they’re just too difficult to move around otherwise.

As for what’s contributing to the increase in demand, there are several reasons why it’s happening.

1. Higher import demands

The first and most prominent contributor to the boost in flatbed use correlates with a high demand for imported goods. Due to current events and supply chain complications, that upward trend may start to taper off soon. Until now, it’s been a significant driving factor.

Refrigerated and cold storage flatbeds have been necessary to transport goods coming out of port markets such as Houston, Jacksonville and Savannah. Not only are many of the products coming from overseas of high quality, but they’re also relatively inexpensive compared to domestic options. China, especially, has been a major supplier of imported goods and materials.

Flatbed truck on highway at sunset.
(Photo credit: Jim Allen/FreightWaves)

2. Construction activity on the rise

Another major contributor is the healthy and rapid growth of the construction sector. The U.S. construction industry is expected to record a compound annual growth rate (CAGR) of 4.9% and reach a total value of $1,804.8 billion by 2023. Even the residential construction industry is booming, with a CAGR of 9.1% from 2014 to 2018.

Higher demand for any construction project means a growing demand for materials, components and machinery, a majority of which must be transported using flatbed freight vehicles. Many of the materials –  including wood, steel and more – will not fit on other transport options.

3. Oil and drilling booms

In addition to the construction and import sector, the world has seen an increased demand for crude oil. That means both the shipment and import of oil-based goods has picked up, alongside essential drilling operations. Stable energy prices have only exacerbated this trend, as the higher demand for energy means a higher demand for oil and fuel. It’s also helped stabilize oil prices, altogether creating an efficient market.

The ecosystem is undoubtedly seeing a connection to these higher demands and activities, and it’s contributing to growth across the board. As one might expect, many of the materials needed in the industry require flatbeds to move the freight, particularly oil drums and containers.

Flatbed truck on highway at night.
(Photo credit: Jim Allen/FreightWaves)

4. Healthy consumer markets

Yet another trend that might see slower activity going forward due to current events is consumer shopping activity. Until now, it’s been quite the opposite. A phenomenal consumer market has contributed to a higher demand for general goods. Many retailers have been taking on larger and larger shipments of  goods, which has helped to enhance the need for flatbed-type freight containers and vehicles.

The 2019 shopping and holiday season saw record numbers, despite having fewer days compared to previous years. Overall, holiday retail sales saw an increase of 3.4%, making it one of the best-performing years in a long time.

5. Larger goods mean larger transports

Another reason why flatbeds are in high demand is because larger goods are being moved about more openly and regularly. The larger the goods and materials, the larger the transport option needs to be. That makes flatbeds the obvious choice. Everything from furniture and large electronics to online-order building materials is contributing to the need for larger transports.

Online retail channels are especially seeing an increase in purchases and activity, and many of the big names are starting to offer new goods. Amazon, for example, has a vast selection of furniture for both indoors and out. Other companies such as Wayfair, Walmart and Lowe’s, for example, carry large items too and offer free residential shipping.

As consumers become more comfortable making big purchases online, more goods are being moved about the country – even globally – and it means shipping and freight companies need to step up their game.

Flatbed truck carrying pipe with thunderstorms in the distance.
(Photo credit: Jim Allen/FreightWaves)

Will the trend continue?

While it remains to be seen whether or not this flatbed freight boom will continue, the numbers have been positive for quite some time.

Organizations and individuals have had a more pronounced need to transport and move larger goods and materials, which has helped to boost the demand for flatbed freight options. It’s undoubtedly proved fruitful for the entire flatbed freight sector.

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Kayla Matthews

Kayla Matthews is a technology journalist and writer interested in manufacturing and the supply chain. Her work has been published on Thomas Insights, Industrial Machinery Digest, American Machinist and Manufacturing.net.

4 Comments

  1. NEWS FLASH March 17 2020

    Coronavirus just crashed a critical survey of trucking outlooks to an all-time low, and it’s a chilling sign for the economy

    David Nobles, a truck driver in Central Texas, was getting his life in order. He had just gotten married, bought a new truck, and was working out a loan to build a new home.

    Then, coronavirus hit — forcing everything from conferences to concerts to be canceled. Public health experts have deemed these cancellations necessary to squash the spread of coronavirus, but it’s a major threat to service-oriented industries and the people who work for them. Nobles was one of those people, and suddenly lost his job transporting band and stage equipment. 

    “In an overnight frenzy, the whole touring industry came to a halt,” Nobles told Business Insider. “Singers, comedians, sports, everything that involved touring. Our shows have been canceled and or postponed until at least the end of the summer.”
    That means the supplier he worked for had to let the entire transportation team go. 

    “Now, I’m left picking up the pieces — trying to keep my new wife happy and trusting in me that I’ll find another job,” Nobles said.

    Nobles is one of many in the industry experiencing the same struggles. Across the board, trucking executives are sounding the alarm on how coronavirus will affect their business, according to the Bank of American Truck Shipper Survey released Friday. 

    The survey hit an all-time low for shippers’ view of near-term demand, which covers the next three months, since it launched in 2012. The indicator dipped 10% from the prior survey, “highlighting the deteriorating demand environment as the COVID-19 virus spread,” wrote Bank of America analyst Ken Hoexter. 

    Some truck drivers are putting in overtime; retailers are demanding more and more supplies as panic shoppers ransack shelves for supplies. Online orders are also set to increase, with Amazon hiring an additional 100,000 warehouse workers to keep up with “unprecedented” demand. 

    But others, like Nobles, have lost their jobs or are seeing demand peter out, as truck drivers move much more than just retail goods. They’re involved in hauling everything from crude oil to vehicles and home-building materials — all sectors of the economy that are forecasted to falter amid coronavirus. 

    Do you work in the trucking industry? Email rpremack@businessinsider DOT com with your story on how coronavirus is changing your work.

    A March 11 Morgan Stanley survey of 350 freight-transportation stakeholders shows building concern, too. About 80% of those surveyed said coronavirus is affecting their business, up from 60% two weeks prior. Still, many reported that impact to be “low” as of last week. 

    That leaves truck drivers like Minnesota-based Chad Childress, who hauls wheat, corn, and other agricultural products, feeling out of options. Some 300,000 to 400,000 truck drivers own and operate their trucks, meaning that they don’t have much protection if rates or demand fall.

    “With all the talks in the news from the president about help for working families affected by the outbreak, there hasn’t been any talks about the owner-operator with one truck and a family,” Childress said. “Where does that person turn to for aid during this time?”

    Why the trucking industry points to where the rest of the economy is headed

    Trucking is often looked at as a leading indicator of where the rest of the economy is headed. As 71% of America’s freight is moved on trucks, companies foreseeing the need for fewer trucks is typically an omen of an economic downturn: If manufacturers are producing less and people are buying less, there’s less of a need to move goods.

    “Because trucking participates in all phases of manufacturing, it increases as manufacturing starts to ramp up, giving it leading indication on economic growth,” Steve Tam, the vice president of ACT Research, previously told Business Insider.

    When the rest of America is headed for a downturn, freight usually dips first, a 2019 report from Convoy’s economic research division said. The industry went into a recession in April 2006, more than a year before the rest of the economy was clobbered by the Great Recession of 2008. 

    Freight has been in a downturn since late 2018 or early 2019, according to various experts. In the first half of 2019, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the amount of bankruptcies from the same period last year — 175. 

    Many predicted before coronavirus slammed the overall economy that trucking would not pull out of this recession until the second half of 2020. But now, instead of a recovery, analysts like Bank of America’s Hoexter believe there’s “a sharply rising risk of recession.”

    That not only affects people like Nobles, but the industry as a whole. ”

    End quote ………………
    “This is hard,” Nobles said. “Overnight, mine and thousands of others’ lives fell apart.”
     

  2. NEWS FLASH March 19 2020
    Quote :
    Coronavirus pandemic puts the brakes on the trucking industry

    INDIANAPOLIS — Last week the Department of Transportation relaxed some of the rules on driving hours for truckers if they’re hauling medical or emergency supplies.

    Truckers who aren’t hauling those items, however, are starting to see a decline in business, similar to other industries dealing with the COVID-19 pandemic.

    “I heard on the news that everything was shutting down, the truck drivers can’t get any food, you can’t get a shower certain places because they are closing everything down but we’re the ones out here delivering all the good and we can’t be treated any better than this?” Dia Moore, a truck driver said. “That’s not cool.”

    Moore is one off the many truck drivers passing through the crossroads of America. She said she hasn’t had any issues so far on her cross country journey, but she has noticed more trucks parked at truck stops and fewer on the road.

    “Nothing is moving,” Moore said. “So if all the truck drivers just stop, the whole country is going to be stopped because you can’t get anything in.”

    Larisa Williams is an independent dispatcher. She’s been in the trucking industry for nearly 20 years and she’s never seen anything like what coronavirus is doing to the country.

    “I’d say if my trucking friends had gotten together and tried to make a map of what something like this would look like we would’ve been dead wrong,” Williams said. “We wouldn’t have expected this.”

    Williams said right now a trucker’s demand depends on what they are hauling. Drivers hauling non-essential good like cars or lumber would get this response if they call a dispatcher for another load.

    “I’ll look, but good luck, that’s probably one of the ones that’s pretty non-essential right now,” Williams said.

    A driver carrying essential household good like food or toilet paper would get a different response.
    “You’re golden, I’ll find you one,” Williams said.
    End quote ……….

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