June 10, 2022
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A private fleet is an in-house fleet of trucks that shippers use to transport their goods. Private fleets are operated by companies whose primary business is not transportation. Think of Walmart or PepsiCo trucks. Those drivers are employed by the company that makes the goods in their trucks.
When a company uses a private fleet, they are responsible for buying and maintaining equipment, complying with all state and federal regulations, hiring drivers, and paying for fuel and insurance. This can add a lot of complexity to a company whose specialty is not trucking.
Shippers use private fleets for a variety of reasons. Since they complete visibility of their goods from start to finish, there can be no passing the blame from one company to another if goods are missing or damaged in transit.
They can also provide better customer service to their clients when they control everything end-to-end. If customers have questions about the status of their shipment, companies with private fleets can find out all the shipment information internally without relying on another company to provide information.
With a private fleet, shippers can prioritize their freight themselves rather than rely on a 3PL company or owner-operator. Additionally, if a company’s goods require specialized equipment for transportation or delivery, maintaining a private fleet enables them to ensure all trucks have that special equipment. This can prevent headaches down the road for both customers and drivers.
Another big reason companies utilize private fleets is because of the branding opportunities. For example, when a PepsiCo truck is going down the road, everyone driving around them recognizes it. That kind of advertising can do wonders for companies.
While many companies use private fleets for their transportation needs, a lot of companies are content outsourcing their fleet operations. If a company doesn’t specialize in freight transportation, then managing a fleet of even just 10-20 trucks can be complex and daunting. Even with staffing partners and programs like Driver Ready, keeping enough staff on board and maintaining a fleet of trucks can be difficult if you’re not familiar with the transportation industry.
With the current driver shortage, decreased retention rates in the industry, and all the headaches fleet management can bring, businesses have to choose where to direct their focus and their resources. Their core business may need their full attention, and private fleet trucking operations may take a backseat. This can lead to increased operating costs, unhappy truck drivers, and more problems. The prestige of having branded trucks delivering your goods may not be worth the headaches that come with it.
Additionally, the current economy has created an increased demand for expedited delivery at ever-decreasing costs to consumers, so a private fleet can turn out to be less cost-effective than for-hire carriers or dedicated fleets for many businesses. Although some companies with private fleets utilize 3PLs or staffing agencies to save on time and resources, the costs may still prove quite high.
Private fleets are different from dedicated fleets, but they may seem the same at first. Dedicated fleets are operated by trucking companies who guarantee capacity to the shipper for a period of time. Typically the contracts are for 2-4 years. With a dedicated fleet, the shipper doesn’t have the responsibilities of buying and maintaining equipment or hiring drivers, but they do have guaranteed capacity and often better customer service from their fleet than with a common carrier.
Private fleets account for almost half of the trucking industry. Companies like Tyson Foods, Sysco, and Haliburton all use private fleets. PepsiCo currently has the largest private fleet with 10,870 tractor trailers as of 2021. By comparison, Walmart has 7,400 trucks.
There are over 340,000 private fleets currently operating in the US. For-hire carriers account for just under 170,000 fleets, and there are about 203,000 independent owner-operators. And the growth in transportation is leaning toward private fleets as fuel and labor costs increase, supply chain issues compound, and companies want stricter control over their transportation services and costs.
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