Heavy Duty Trucking

OCT 2014

The Fleet Business Authority

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24 HDT • OCTOBER 2014 www.truckinginfo.com hotline Trucking's Most Respected Business Report "There are constant changes where you need maintenance support as the distribution patterns change." The growth of third-party maintenance Third-party logistics companies set a template in the transportation industry that has guided the rise of third party mainte- nance providers, according to Larry Chaplin, president of Master Fleet LLC, a Wisconsin- based maintenance provider. Speaking at a session on outsourced maintenance at TMW Systems' Transforum user conference in Nashville, Tennessee, last month, Chaplin noted that 3PLs were able to succeed because of they were able to meet the needs of both shippers and car- riers and to do so more efficiently than either entity could on its own. There are similar forces at work in the outsourced fleet maintenance sector, he said. Building a maintenance facility is a huge cost for a fleet, and the question has always been where to put them, he noted. Should they be at the terminal, along a company's major lanes, or somewhere else? But there have been huge changes in trucking in recent years. Freight lanes change. There's more intermodal freight. Retailers and manufacturers are mov- ing their distribution centers closer to population centers. "There are constant changes where you need maintenance support as the distribu- tion patterns change," he said. These changes mean fleets need flexibil- ity in where they have their trucks serviced, and outsourcing that maintenance to third- party providers gives them that flexibility. As with 3PLs, third-party maintenance providers enjoy volume efficiencies. They can spread their overhead around. They can use technology to make sure there is a demand and capacity match. Outside shops have extended hours of coverage. The shortage of trained technicians is also tough on smaller fleet shows. Chaplin said the larger outfits go straight to the tech schools and get the "cream of the crop" by offering internships, tools and other incentives, along with career paths. Other advantages the larger operations have include being able to afford the vari- ous diagnostic tools required to work on trucks from different OEMs and the ability to invest in maintenance management technologies and software systems. –– Jim Beach, Technology Editor 3PL CEOs confident about growth T he chief executives of third-party logistics providers are confident about the current state and future revenue growth of their companies and regional 3PL industries, accord- ing to an annual survey. The annual survey included the CEOs of the 27 largest 3PLs in the North American, European and Asian Pacific regions. It was sponsored and underwritten by Penske Logistics and was authored by Robert Lieb a professor of supply chain management at Northwestern University, and Joe Carlier, senior vice president of sales at Penske. Some highlights: • 75% of the companies involved were profitable in 2013, generating approximately $46 billion in revenue combined. • North American CEOs forecast a three-year company growth of 10.77% and Asian-Pacific CEOs forecast growth of 16.2%. • When asked to project regional 3PL industry revenue growth rates for the next three years in all three regions. North American CEOs projected average growth rates of 6.54%, European CEOs projected 4.17% and Asian-Pacific CEOs projected 10.4%. The survey was published in a re- port that found several industry-wide shifts, including a near-shoring trend that was growing in North America as 3PL customers moved manufac- turing from China to Mexico due to rising wages. 3PL CEOs confident Survey Says According to Larry Chaplin, president of Master Fleet, building a main- tenance facility is a huge cost for a fleet. PHOTO © ISTOCKPHOTO.COM

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