The North American truckload (TL) industry is unlike any other – it is dynamic, complex, and rife with uncertainty.
For transportation buyers, this creates a challenging business environment. Perhaps one of the biggest challenges is simply building successful relationships among the countless number of carriers in the market. (They do in fact seem countless. Estimates for the number of U.S. trucking firms range from 100,000 to 700,000. Whatever the actual number though, it is safe to say the market is highly fragmented.)
Because there are so many transportation providers in the market, pricing and capacity are highly volatile and they generally trend in lockstep. That is, when capacity tightens, rates quickly tick upward, and when there is abundance, rates decline. The effect of this relationship between price and capacity is that shippers are constantly at risk of losing capacity or dealing with sudden rate increases, forcing them to face such strategic questions as should they use a 3PL, adopt more spot rates, or develop a core carrier program?
