Current Industry Challenges Discussed by an Oakland Intermodal Services Firm
Within the last year, prices of rail transportation have increased by 4.9% and the demand for trucking services continues to be on the rise. Still, both industries are experiencing shortages, and this is affecting the way businesses can transport their product. Many companies are rethinking their logistics strategy as a result, and intermodal transportation has been a great remedy for businesses needing to adjust.
The shortage in the trucking industry is heavily influenced by the amount of active workers. Many of today’s truckers come from the Baby Boomer era and are nearing retirement age. Today, truckers are leaving the workforce at a faster rate than new workers are entering the profession, putting a strain on big and small companies that provide trucking services. In addition, new federal truck safety regulations have prompted some to leave the industry, due to the burdensome restrictions. Smaller trucking companies are experiencing the biggest hit with the new shift in the trucking industry; 390 companies declared bankruptcy last year.
In the railroad industry, there is a shrinking amount of available boxcars, and this is driving pricing upward. Usable boxcars have decreased 41% within the last 10 years. This decline is producing a boxcar shortage and creating roadblocks for industries that use them. For example, the paper industry had to diminish the amount of product being manufactured when it could not obtain a sufficient enough supply of boxcars to transport its cargo. Despite this boxcar shortage, railroad companies are not purchasing new boxcars—the price to do so is very expensive.
Companies are now relying more heavily on intermodal transportation to account for the shift in both industries. Intermodal volume has increased significantly and reached a record high last year. Many companies are still figuring out the best logistics plan due to the new trends and escalated pricing.
Bay Area Logistics Company Knows Intermodal Transportation
At R&A, we specialize in logistics and have been a trusted source for product transportation for over 39 years. Our full and complete transportation methods simplify logistics planning and make for an efficient and cost effective service. Call (510) 632-7112 today to learn how R&A Trucking can help with your logistics strategy. You can also fill out an online contact form right here on our website and we’ll get in touch with you shortly.