A Brief History of the Logistics Industry, Logistic Services NW, LLC

A Brief History of the Logistics Industry.

by Jorge Bailey. Today, the word “logistics” is commonplace and shipping trucks aren’t just on the road, they’re in popular culture. Over 70 percent of shipped goods in America travel by truckload. But it wasn’t always that way. Before we look to the future of an industry, I think it makes sense to look back and see where it all started. Before the 20 th century was known as the “good old days” of the LTL (Less Than Truckload) industry. Farmers used co-ops to consolidate their crops to get them to market. This was a community event where all the participants negotiated what was fair for the person transporting the goods, whether it was money or a portion of the food. But as time went on and our country grew, there was a need for a more sophisticated method of transportation. In 1935, Congress passed the Motor Carrier Act, which gave the Interstate Commerce Commission (ICC) the authority to regulate the industry. The ICC began granting operating permits, approving trucking routes, and setting tariff rates. The ICC set uniform tariff rates for hauling freight and since the rates were uniform for all trucking companies, there was little or no competition due to pricing. At that time, it wasn’t uncommon to take 10 days or even 2 weeks to get a load from the east coast to the west. Fast-forward several decades: The Motor Carrier Act of 1980 gave the industry further reform and by the mid-80s, deregulation. Many new firms entered the market—especially low-cost, non-union carriers. In the ten years between 1980 and 1990, the number of licensed carriers doubled—to over forty thousand. Jumping from 1990 to present, there are only a handful of unionized long haul carriers left and nearly 1,400 carriers a year leave the industry either by acquisition or failure. It’s now more important than ever that a shipper trust the transportation provider. For years LTL carriers have done just one thing: move shipments throughout the country. They have limited abilities but suggest they do it all. They advertise services but must outsource them, so they are performed at a premium. With an asset-based carrier, if the customer wants something that’s outside the box, it’s discouraged by the sales team because it takes too much time to arrange and has limited rewards. It becomes all about the call cycle and paperwork, not the customer. As time goes on, the customer’s needs become less and less important. The difference with Logistic Services NW is that we really are limitless as to our Supply Chain offerings. We have a uniquely strong alliance with our partners and we pride ourselves in providing a superior customer experience—we don’t just pay lip service to the term “customer service.” Our team is an extremely diversified group. Our employees have been in the Transportation industry for over 100 years combined. There is virtually nothing in the Supply Chain world we cannot do. Give us your worst challenge and let us prove ourselves!