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Alex Borg

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Jun 6, 2023

4 minute read

Fleet Management Blog

Trucking Logistics: Business Model, Pain Points & Trends

Anytime you go to a store or order something online, your purchases were made possible thanks to trucking logistics. With every passing year, the retail logistics industry grows to meet ever-increasing consumer demand.

Trucking Logistics 101

What is trucking logistics?

As one of the primary ways goods reach consumers, trucks play an indispensable role in the supply chain for just about anything you can think of. Trucking logistics refers to the planning and analysis that goes into making freight transport by truck as productive and efficient as possible. From the lens of trucking logistics, every decision related to routing, vehicle procurement, driver assignments, fuel purchasing and beyond is an opportunity for optimization.

What is a trucking logistics company?

When merchants have goods they need to move by truck, they hire trucking logistics companies to facilitate. A trucking logistics company is an organization that, on behalf of its clients, handles various supply chain processes to get freight where it needs to be safely and efficiently. Depending on the company, their services might include warehousing, packaging, distribution and disposal.

Business model of trucking logistics company

Most trucking logistics companies fall into one of two categories: freight brokers and third-party logistics companies (commonly abbreviated as 3PLs). Freight brokers coordinate storage and transportation activities on behalf of their clients but don’t actually own any warehouses or trucks. Instead, they delegate those actions to their network of small and medium-sized carriers. 3PLs on the other hand do own warehouses and vehicles and carry out storage and transportation work themselves. While both approaches have multiple advantages in their favor, freight brokers tend to boast about the flexibility in options they offer their clients while 3PLs point to the cohesion made possible by having all operations under one roof.

How a logistics company handles supply chain management

While the terms “supply chain management” and “logistics” are often used interchangeably, they apply to different activities. Logistics refers mainly to the transport and storage of goods from their point of origin to consumers. Supply chain management is an umbrella term for every step involved in creating and ultimately selling a product such as material sourcing, manufacturing, and selling. Put simply, logistics describes only a portion of what supply chain management entails. For the most part, logistics companies stick to warehousing and moving goods (because those activities are their forte) and leave the other elements of supply chain management to other firms.

Common pain points for trucking logistics companies

Trucking logistics companies of all sizes and specialties often contend with these common pain points:

  • Tracking and analyzing fuel expenses
  • Staying compliant with federal regulations
  • Relaying shipment updates to clients
  • Balancing driver schedules effectively
  • Transporting freight safely and securely
  • Maintaining trucking fleet vehicles

But with the help of software, several of these challenges can be alleviated or eliminated entirely. For example, many trucking logistics companies manage their service work via a fleet maintenance app. Automated reminders, electronic work orders and convenient collaboration tools ensure preventive maintenance schedules are adhered to. Truck fleet maintenance management is further made easier by anytime access to customizable reports that make it easy for stakeholders to identify areas for operational improvement.

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What to look for in a logistics company

When searching for a logistics partner, organizations should keep an eye out for these qualities:

  • Top-notch customer service (24/7 support, tracking numbers, etc.)
  • Extensive use of technology (GPS, RFID, online ordering, etc.)
  • Certifications (refrigerated goods, hazmat, etc.)
  • Positive reputation
  • Competitive rates
  • Financial stability

Trucking and logistics trends for 2023

Finally, any exploration of trucking logistics would be incomplete without taking a look at what the immediate future is likely to hold for the industry. Like virtually every aspect of the economy, ongoing inflation has had a profound impact on trucking logistics, causing everything from packaging materials to vehicle parts to skyrocket in cost. In their latest update as of this writing, the Bureau of Labor Statistics reported a 4.9 percent increase in the Consumer Price Index. Coupled with multiple interest rate hikes, these numbers have many economists concerned about a potential recession on the horizon. While nothing is certain when it comes to economic forecasts, downturn indicators aren’t looking good, so logistics organizations might want to prepare accordingly.

In addition to being more expensive, vehicles have also become increasingly hard to find in recent years. Logistics companies should expect this trend to continue for most of 2023, if not longer. While manufacturers have ramped up their production after a slump in output during the worst days of the pandemic, order backlogs are so high that meeting new demand will be difficult for the foreseeable months. With no other option, many fleets are attempting to extend the lives of their existing vehicles, as proven by Bloomberg’s reporting that utilization rates have been at historic levels.

On a more optimistic note, logistics professionals can look forward to trucking trade shows returning in full force throughout 2023 and beyond. After being sidelined by COVID for the past few years, trucking conferences and trade shows of all sizes and formats are finally back. Logistics professionals looking to forge new connections, hear the latest best practices or check out new vehicles and equipment in-person won’t want to miss the events slated for 2023.

Interested in supporting your trucking operations with fleet management software? Then request a demo or start a free trial of Fleetio today!

About the Author

Alex Borg

Alex Borg

Content Marketing Specialist

Alex Borg is a Content Marketing Specialist at Fleetio. Beyond writing, his interests include going to concerts, playing guitar, and hanging out at the beach.

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