Freight shift

Feb. 1, 2007
You don't have to be a trucker or a fleet owner to know global economic forces are re-shaping freight distribution patterns here at home.

You don't have to be a trucker or a fleet owner to know global economic forces are re-shaping freight distribution patterns here at home.

Just go shopping, be it to Wal-Mart or the nearest mall. Chances are rather good the clothes you buy were made in Vietnam. Or Romania. Or Mauritius. Or a Caribbean nation you only thought of as a vacation destination. China alone sends us the government only knows how many container loads every day of everything from plastic toys to furniture and beyond.

Obviously all that stuff being disgorged at ocean ports on both coasts night and day is displacing goods that were once manufactured here. To be fair, this tsunami of imports is no doubt also creating domestic demand, as the much lower cost of many foreign-made consumer products makes them accessible to more buyers than ever.

This topic is political grist for free trade vs. protection battles and is sensationally covered in the general media, too. But frankly it seems pretty well neglected by trucking commentators.

But someone who knows this end of the trucking marketplace as well as the back of his hand does see the striking impact the rise in global manufacturing is having on domestic freight patterns.

“What we're seeing in the U.S. is a fundamental shift in the supply chain and consequently, how freight is moving,” Robert W. Zoller, president & CEO of Kitty Hawk Inc. recently told me.

Kitty Hawk is a publicly traded holding company based at Dallas-Fort Worth International Airport. Not surprisingly, its roots are in airfreight. With over 30 years experience with air cargo, it also operates on the ground. It consists of three wholly owned subsidiaries — Kitty Hawk Cargo, Kitty Hawk Aircargo and Kitty Hawk Ground.

According to Zoller, Kitty Hawk's key strength is that it operates “the only independent combined air and ground heavyweight freight networks in North America.” That came about in late '05, when the firm launched its scheduled airport-to-airport LTL network.

That being said, clearly Zoller is positioned to see where freight is coming and going. “The offshore sourcing of finished goods as well as materials and subassembly work is affecting shipping patterns.

“What's more,” he continues, “the volatility of fuel prices here is driving decisions about using centralized vs. regional warehouses and whether to ship by truck, rail or ocean vessel.”

Zoller says whether goods are distributed centrally or regionally will depend to some degree on competitive factors but he reports there's “more regionalization [going into 2007] than I had expected. That may be due to the cost of transporting inventory shorter distances being less. Of course, this also depends on the type of freight and even time of delivery request. But, in general, we are seeing shippers looking for service providers on a regional basis.”

An upshot of this, Zoller contends, is more specialization by carriers. “We're beginning to see where a number of carriers had tried to serve different customer bases or industries but have begun focusing on areas they know best and can serve better.

“Kitty Hawk Ground is an example,” he continues. “This operation is focused on expedited air freight moving from airport to airport around North America. And we've experienced growth” along with the growth in shipping coming through international gateways on the East and West Coasts. “Specifically, we've concentrated on building a larger presence on the West Coast from Sacramento down to San Diego,” he notes.

For more information on the various Kitty Hawk companies, go to this main web site:

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