Spotlight on the US freight broker industry
For a number of reasons, freight brokers have been enjoying increased revenue in the past year. The ongoing economic recovery is bringing an increase in demand for trucking services. And the good news is that this trend is expecting to continue for several more years. A report by the American Trucking Association (ATA) predicts that by 2022, overall revenue in the trucking industry will increase by 66 percent, while tonnage will see a 24 percent growth.
Another reason for increased revenue is increasing logistics efficiency. The increased use of less-than-truckload (LTL), a territory reserved for freight brokers, means speedier shipments for shippers and more profits for brokers.
Entry into Freight Brokering
When the freight broker bond amount was increased to $75,000 in 2013, one rationale for the increase was to raise standards for freight brokers and, in retrospect, the strategy seems to have been successful.
It’s true that a small percentage of brokers were forced out of business. However, the remaining brokers were people with good credit and reliability in the industry. This in turn raised overall trust in freight brokers, so entry into the profession has eased a bit. And the numbers are proving it– the number of brokers has been steadily increasing since 2013, and this year is no exception. MyCarrierResources.com reports that in January there were 15,023 registered brokers, whereas in October the number had jumped to 15,916.
Todd Bryant, president and founder of Bryant Surety Bonds, takes a look at the American trucking industry over the past year through the lens of a freight broker – read the rest of his insightful piece in the March issue of Supply Chain Digital.
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany