Just wondering, if reshoring occurs and import of Chinese goods is reduced (by say 50%), then amount of international freight reduces by 50%, but domestic freight does not really replace it. E.g. if a factory is based in Nevada and ships to California, they might use a FedEx or other delivery service (even Amazon tbh) instead of Fwrd air. Is this a problem or I don't understand something here?
LTL doesn't compete with parcel, the category is a different size. In between a cargo container and a parcel. Think something on a pallet, or a few somethings on a few pallets. The LTL market is really fragmented with no clear leadership or very large players. It might be ready for consolidation. FWRD does international LTL as well, but if I am remembering correctly, it's more of a cost driver than a profit driver. Having good volumes on regular routes allows the LTL loads to be consolidated into full containers. Just like airlines making more money when the planes are full, LTL makes more money when their containers are full. International routes are harder to have the volume to keep them profitable.
Okay got it. Just trying to understand if the TAM for LTL market is growing, shrinking or staying flat. It seems if reshoring occurs and we reduce imports, as long as demand for industrial goods stays the same, the LTL shipment quantity will remain the same. It gets a slight boost in moving machinery within the country, but existing demand stays same regardless of whether we imported those goods or manufacture it locally.
Just wondering, if reshoring occurs and import of Chinese goods is reduced (by say 50%), then amount of international freight reduces by 50%, but domestic freight does not really replace it. E.g. if a factory is based in Nevada and ships to California, they might use a FedEx or other delivery service (even Amazon tbh) instead of Fwrd air. Is this a problem or I don't understand something here?
LTL doesn't compete with parcel, the category is a different size. In between a cargo container and a parcel. Think something on a pallet, or a few somethings on a few pallets. The LTL market is really fragmented with no clear leadership or very large players. It might be ready for consolidation. FWRD does international LTL as well, but if I am remembering correctly, it's more of a cost driver than a profit driver. Having good volumes on regular routes allows the LTL loads to be consolidated into full containers. Just like airlines making more money when the planes are full, LTL makes more money when their containers are full. International routes are harder to have the volume to keep them profitable.
Okay got it. Just trying to understand if the TAM for LTL market is growing, shrinking or staying flat. It seems if reshoring occurs and we reduce imports, as long as demand for industrial goods stays the same, the LTL shipment quantity will remain the same. It gets a slight boost in moving machinery within the country, but existing demand stays same regardless of whether we imported those goods or manufacture it locally.
Thanks