Many industries are changing due to the improvement of technology and the mindset shift caused by revolutionary businesses like Airbnb and Uber. People are quickly realizing the potential and value of asset sharing in many different facets — including the logistics industry.
The trucking industry has seen a lot of changes over the past few decades, from the introduction of new technologies to the implementation of safety regulations. One of the most recent changes has been the use of asset sharing and trailer pools.
Asset sharing to improve route optimization is already a hot topic at many industry conferences and webcasts. While some remain resistant to change, many see the value in trimming out deadhead miles and increasing asset utilization through solutions like smart rental.
This blog post will explore how asset sharing and trailer pools are impacting the trucking industry with cost savings and increased efficiency. We’ll discuss how these modern strategies work, their advantages and disadvantages, and how they are changing the trucking industry for the better. Finally, we’ll look at how trucking companies can take advantage of these new services to stay competitive and profitable.
What is Asset Sharing for Truckers?
To move a load, logistics companies need an available driver, a power unit (tractor), and a way to hold cargo (trailer). In many cases, the exact ratios needed to support optimal capacity are not balanced. While some companies have a shortage of drivers, other companies might have a shortage of trailers.
For companies with idle trailers, the underutilized assets are sitting in a lot while the company misses out on potential profits. Assets are not cheap, so the investment into a trailer comes with an expectation to regain financial footing through use. In other words, if you aren’t using your trailer, you’re wasting an opportunity to boost your bottom line.
Other companies can’t keep up with demand because they don’t have the available trailers to take on additional lanes. Some companies have extra drivers and power units but aren’t ready to spring for a new trailer. Other companies have to wait on their trailers to be unloaded and ready for the next load, causing unnecessary downtime for their drivers.
Asset sharing makes it possible for companies to list excess assets or find the trailers they need as listed by another logistics player. Rather than use traditional renting processes or buying a new asset outright, companies can search for trailers at any time on a smart trailer-sharing platform and work directly with the asset owner to determine the price, duration, and details of the agreement. Asset sharing is more transparent, flexible, and convenient than traditional rental for truck drivers and brokers.
What is a Trailer Pool?
Asset-based carriers can increase efficiency and lower expenses by creating a pool of trailers. A trailer pool makes it possible for the carrier to drop off their trailers at shipper facilities so they can be loaded or unloaded without driver detention.
The options for adjusting capacity used to be very limited. In the past, if you needed a new trailer, you’d have to purchase one or head to a rental yard. Now, transportation businesses create trailer pools for a rotation of trailers that can be used for their jobs and lanes whenever they have a need. Trailer pool management allows companies to adjust their assets based on their capacity level and job availability.
Benefits of a Trailer Pool
There are several reasons carriers choose to build a trailer pool.
- Reduced wait time: With additional trailers available for loads, drivers don’t have to sit around at loading docks or wait on the shippers before taking the next load. As the carrier team waits on the trailer to be loaded or unloaded, the driver can move on to another load.
- More flexibility for shippers: When drivers aren’t waiting on-site for their trailer, shippers aren’t in a rush to load or unload their goods. A trailer pool makes it possible for a shipper to move at its own pace and strengthens the relationship.
- Lower costs: Avoiding unnecessary detention time can help save costs while improving driver satisfaction rates. At the same time, an established trailer pool also saves carrier money because they can still take on other loads while some trailers are held up in a shipper’s lot.
- Flexible capacity: A trailer pool makes it possible for carriers to take on loads based on driver availability rather than asset availability. A group of trailers is available for use between multiple drivers, allowing them to take on more loads when possible without investing in additional assets.
How Smart Rental Combats Trailer Shortages
It’s hard to find used semi-trailers for sale, and even new trailers are hard to purchase because of supply shortages. Plus, not all businesses can afford the upfront investment cost of buying a trailer, so rental needs continue to increase as companies look to scale.
Rental trailer inventory grew by 6.5% to 585,000 in 2021, with many rental companies recording nearly 100% utilization. Rental trailers account for 10% to 14% of all trailers in North America, and 82% of rentals are dry vans.
However, traditional rental is limited to operating hours and inventory levels. Smart rental not only broadens the options and reduces the limitations, but it also offers a solution to combat trailer shortages.
Smart rental makes it possible to grow a trailer pool without making additional purchases. Carriers can use a smart rental platform to help them automatically find listed trailers that are best positioned for their next load.
The trailer shortage has made it more expensive than ever to own additional assets. Rather than face high prices and long wait times for a new trailer, carriers can access idle trailers from asset owners. Smart trailer rental makes it easier for asset owners and carriers to agree on pricing, file necessary paperwork, and make smarter business decisions to improve their bottom line.
How Asset Sharing and Trailer Pools are Changing the Logistics Industry
Do you see change on the horizon for trucking? Think about how asset-sharing platforms have transformed other industries. For example, Uber has completely changed how people get rides when they don’t have a car available. The ride-sharing app has had a major impact on the taxi industry. And think about technology — like GPS — that has already changed the logistics industry forever.
Technology can make it easier for smaller companies and owner-operators to compete with enterprise corporations.
Smart asset sharing changes how truckers use and share their assets. Renting was sluggish, time-consuming, and inconvenient, but technology is changing that. Online platform vHub offers a convenient platform and active technology to make asset sharing a strategic solution to increase efficiency, reduce waste, and scale quickly.
Asset sharing is not the same thing as a traditional rental, though there are many similar elements. With vHub’s asset-sharing platform, you still pay to rent trailers or earn money if someone wants to use your idle asset. And asset owners will still set parameters around availability dates and drop-off locations. However, an asset-sharing platform opens the door to additional players who aren’t solely rental companies. An app makes it possible to access listings, reserve trailers, complete paperwork, and make payments at whatever time is most convenient for you.
The fast-paced nature of trucking means the last thing you need is to be limited to the rigid 9-5 schedule of a typical rental company. This makes vHub a real game changer because it allows individuals and business owners to list their available assets. You are no longer limited to increasing capacity through rental businesses. This person-to-person model is enforced by a platform to avoid miscommunications and keep out bad players.
Truckers and brokers that crave the cutting edge now will find themselves ahead of the competition. Technology is changing the logistics landscape by making it possible for companies to achieve more without burning out their teams or overextending their business.
Explore Smart Asset Sharing with vHub
Don’t get left behind as the industry changes. vHub is a smart trailer-sharing platform created specifically for truckers and logistics industry players. If you are looking for a smarter way to increase trailer utilization or adjust your business capacity, then vHub can help.
Smarter technology makes it easier than ever to see how rental impacts your business. vHub uses Badger to aggressively look for the best deals or assets for your needs, automating the search process to save renters time. vHub also uses Interlock to support billing automation, payment transfers, and bidirectional reporting.
Because vHub optimizes asset sharing, businesses can use the platform to grow and gain more market share. vHub helps you stay focused on other aspects of your business by streamlining and enforcing the rental process.
A free vHub account makes it possible for you to see the options and create trailer listings. Integrate this industry-changing technology now and get a leg up on the competition. Signing up is easy and only takes a few minutes. Start your account now!