J.B. Hunt Logistics Inc., Lowell, AR, chose its first annual Carrier Conference to outline plans for a bidding system that would allow fleets to compete for loads.
The logistics unit of J.B. Hunt Transport matches customers needing to make or receive shipments with contracted carriers.
Asking carriers to bid on the most commonly used shipping routes creates stability for shippers and carriers, Mark Christos, vice president of operations for J.B. Hunt Logistics, told the Arkansas Democrat-Gazette.
Fleets could build regular schedules around the routes, allowing for more efficient use of trucks, he said.
Until now, J.B. Hunt Logistics paid contracted carriers based on the number of miles between pick-up and drop-off points. The new system allows carriers to take things such as frequency of shipments and the time spent waiting at a loading dock into consideration when making a bid on a route.
"We realize that some of the routes have overpaid and some have underpaid," Christos said.
J.B. Hunt Logistics reviewed a year's worth of shipping information on 1,500 shipping routes used at least 50 times a year to learn the characteristics of each route. For each pick-up to drop-off route, characteristics such as a shipper's hours of operation and the length of time a
carrier spends waiting to be unloaded at a dock were studied. The information was passed on to contracted carriers to use in determining bids.
Carriers asked by the Arkansas Democrat-Gazette
generally sounded positive about the plan.
"It sounds like we can get more business this way," said William Langley, president of GWL Transport of Greenville, NC.
Langley said his nine-truck company delivers freight along the east coast. His trucks used to run in all 48 contiguous states, he said. That ended because it was too difficult to find truck
loads in faraway states like Washington that would bring drivers back home to North Carolina.
But Langley said the new system might make it possible to expand his business once again. If he could place a successful bid to deliver items from North Carolina to Washington and be guaranteed a return trip home, he would consider it.
Christos said the bidding system was made possible by J.B. Hunt Logistics' growth over the past four years. As the company gained more shipping customers, it became able to plan
return trips for its carriers, he said.
The company plans to contract at least 1 million shipments this year, up from about 700,000 in 1999, and up 440% from the number of shipments made four years ago. The company had
sales of $700 million last year.