Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/856429
Business 28 | Overdrive | August 2017 Walmart's logistics arm, which encompasses both the retailer's private fleet and transportation out- sourced to for-hire carriers, has told carriers it may opt against doing business with them if they haul for Amazon, says a transportation analyst familiar with the communications. Satish Jindel, head of SJ Consulting of Pittsburgh, says he's heard from several carrier execu- tives this summer that Walmart has relayed such a message to them. Walmart isn't explicitly telling its contracted carriers not to do business with Amazon, Jindel says. Rather, the company is saying "if they are doing business with Amazon, then [Walmart] may choose not to do business with them," he says. The carriers receiving these mes- sages are smaller, in the 100- to 300- truck range, Jindel says. A Walmart spokesperson did not respond to Overdrive's request for comment. Though Walmart and Amazon are competing more closely for online retail dollars, Walmart's message to carriers may be more pragmatic than antagonistic. Jindel says one of Walmart's chief interests is prepara- tion for cyclical busy seasons. "The genuine concern is that when [Walmart] needs 30 trucks from a company, that they get those 30 trucks instead of losing out because they are [working] for Amazon," he says. The company is "protecting its ability to get capacity when they need it." Jindel says the practice isn't unique to Walmart's trucking operations. He's also heard the company has told other suppliers that if they leverage Amazon's cloud storage busi- ness, that's another invitation to be dropped by Walmart. The cloud storage concerns are based on Walmart's proprietary data passing through or being stored on Amazon servers, Jindel says. "I don't want that information in the hands of my competitors." – James Jaillet Walmart to truckers: Avoid Amazon Walmart has concerns about maintaining capacity during cyclical shipping seasons and having its data moving through Amazon's cloud storage. Skyward bound for truckload rates $2.45 $2.40 $2.35 $2.30 $2.25 $2.20 $2.15 $2.10 $2.05 $2.00 $1.95 $1.90 $1.85 $1.80 June - 2015 June - 2016 June - 2017 Flatbed Reefer Dry Van Source: Truckstop.com Spot market rates shot upward in all three major truckload segments in June, according to Truckstop.com. Flatbed and van rates reached their highest points in 18 months or more, and reefer rates reached their highest point in a year. June was the fourth consecutive month that spot market rates climbed month-to-month. Also, DAT Solutions reported record-high availability for van, reefer and flatbed loads. Freight availability climbed 57 percent from the same month last year, with each segment posting a similar gain. – James Jaillet Spurred by growth in consumer spending, manufacturing and interna- tional trade, trucking industry revenue will pass $1 trillion in 2024, according to an annual forecasting report from the American Trucking Associations. Industry revenue is expected to grow 5.4 percent annually between 2018 and 2023. Growth then is expected to slow to 4.7 percent through 2028, with carrier revenue totaling $1.24 trillion by the end of that year. ATA builds its forecast on data from the U.S. Army Corps of Engineers, U.S. Energy Information Administration, U.S. Bureau of Transportation Statistics Commodity Flow Survey, Eno Transportation and IHS Energy, among other sources. – Deanne Winslett Forecast: Trucking to grow 5.4% annually