SkyBitz shares five strategies to increase trailer capacity and efficiency using current assets.  -  Graphic: SkyBitz

SkyBitz shares five strategies to increase trailer capacity and efficiency using current assets.

Graphic: SkyBitz

Ongoing supply chain issues and labor shortages have trailer manufacturers struggling to keep up with demand in 2023. A softer freight market, rising equipment prices and interest rates do not seem to be slowing the trend.

One of many reasons for increased trailer demand is that more brokerage service providers are purchasing or leasing trailers to offer more capacity to shippers and to save carriers time and money with drop-and-hook and power-only load options.

In January, the ISM manufacturing index showed transportation equipment was one of two manufacturing industries (out of 17 surveyed) with record growth. New trailer orders reached an all-time high in December 2022, and in January the backlog grew to 9.9 months from an 8-month average since August 2021, according to ACT Research.

Despite talk of a possible recession in 2023, freight volumes are expected to grow. Over the next decade trucks and trailers will be moving 2.4 billion more tons of freight than they do today, the American Trucking Association estimates.

5 Ways to Increase Trailer Utilization

When the freight market rebounds — likely in Q3 or Q4, economists say — the backlog of trailer orders could increase further. In the meantime, motor carriers and freight brokers are trying to curtail costs and more fully utilize trailers to increase revenue and profitability.

Here’s a five-part strategy to more efficiently utilize your assets and increase capacity using the same number of trailers.

1. Optimize Trailer Pools.

How many trailers do you have at each location? Is your inventory more or less than what you really need? Answering these questions should not require a time-consuming inventory check or audit. With real-time information on trailer locations and status (empty, loaded, idle times, etc.) you can synchronize capacity with demand and move under-utilized assets to locations where they are needed.

2. Get a Grip on Detention.

Billing customers for detaining equipment and drivers is not the end-all solution. Having pinpoint accuracy of where and when detention events take place is necessary to work with customers to make changes. When you are aware of detention events, fleets can make changes to off-peak appointment times or offer incentives to turn trailers faster to free up capacity and generate more revenue than from detention charges.

3. Do More with Less.

Is a 3:1 trailer-to-tractor ratio ideal for truckload dry van operations? Many fleets have proven it can be much lower. Some fleets run 2.5 trailers or less for every tractor by using data to optimize fleet size. Motor carriers and freight brokers can use visibility of trailer locations and status to analyze fleet-wide utilization trends as well as trailer idle times and average turn times for every customer and location. Such insights are helpful to identify and execute on opportunities to divest under-utilized assets and free up capital.

4. Create New Revenue Streams.

Data can unlock new revenue opportunities. With visibility to underutilized trailers you can dispatch drivers to pick up assets and reposition them where capacity is needed. Another possibility is to rent underutilized trailers to other carriers on a short-term basis. In this case visibility becomes even more important to manage billing and to secure assets. Data can also help with renting older trailers to customers to use for temporary storage.

5. Keep Trailers Longer.

With order backlogs growing on new trailers, fleets and freight brokers may need to hold onto existing assets longer than planned. Monitoring trailer mileage data captured by GPS tracking systems can help with scheduling preventive maintenance and with proactively identifying repair needs. Better maintenance equals better utilization by maximizing the availability of assets, and ensuring they are in the right places at the right times.

Trailers are not the only non-powered assets that fleets use to move freight. Visibility tools help with managing intermodal chassis and containers as well as trailer dollies for less-than-truckload operations, among other equipment types. Fleets with intermodal and LTL operations also need door-to-door visibility of equipment and cargo to drive productivity.

The freight market can change quickly as the past year has shown. Motor carriers and freight brokers do not have the luxury of making short-term capital decisions when purchasing or leasing trailers. Having real-time visibility of trailer locations and status details, and better processes to manage this information, will play a more critical role in the coming months to align capacity and other resources closely with demand amid a growing backlog of new equipment orders.

This article was authored and edited according to HDT editorial standards and style to provide useful information to our readers. Opinions expressed may not reflect those of HDT.

About the Author: Siamak Azmoudeh is vice president of PLM and business development for SkyBitz, a provider of GPS trailer and intermodal container telematics systems for the transportation and logistics industry.