There was a time when expedited shipping meant rush shipments of auto parts from an automotive parts vendor to one of the big three car manufacturers in the United States or Canada. Expedited carriers were called in when a machine or truck broke down and when there was an urgency in moving that part, non-stop, to a specific destination. A quarter century ago, companies such as Roberts Express (now known as FedEx Custom Critical), TNT Olex and TNT Taxi Truck got their start by catering to this market.

As we come to the end of the first decade of the twenty first century, the expedited freight market has evolved in several directions. In the next two blogs, we will look at the forces shaping this growing and important market.

The "Re-Gifting" of Major Freight Markets

As mentioned in some of the recent blogs, the current “freight recession” that has been with us for the past eighteen months or more has had a significant impact on carriers. With volumes deteriorating, shippers and carriers have been going through a process of transformation or cannibalization (or “re-gifting” as one humorous scribe commented recently). As part of this process, intermodal is taking market share from truckload, truckload is going after large LTL shipments, national LTL players are moving into regional LTL markets and LTL players are targeting air freight traffic. The battle for freight is so intense that the term “expedited trucking” is giving way to a new set of terms.

"Next Day" has been Expanded to 750 Miles

For some shippers the requirement is "Next Day Shipping". The next day footprint has been grown from 300 to 600 to 750 miles. All over North America, the “expedited truck” is giving way to the “next day” truck. The “next day” truck gains have come at the expense of air freight. Kitty Hawk that recently filed for bankruptcy is just one of the carriers that have been hurt by the evolution in service demands of LTL shippers. What used to be a premium service at a premium rate, next-day service is becoming the standard on many lanes.

The movement to “next day” lanes was started years ago by shipper pressure to reduce four day lanes to three, three day lanes to two and two day lanes to one. Carriers have been responding to the pressures for the past decade.

Major U.S. Carriers are Expanding their "Next Day" Networks

Recently USF Holland and Averitt Express indicated that they were adding more next day lanes to their networks. USF Holland, part of the YRC Group said it has upgraded 26 lanes in its Southeast and Midwest operating area to next day service. USF Holland had previously done the same for 13 service lanes. Half of Holland’s service lanes now offer next day service. Averitt Express has transitioned a number of second day Texas service lanes to next day service.

FedEx Freight is also targeting growth in this area by reducing its two-day shipping lanes between Las Vegas and the California cities of Oakland, San Jose, Sacramento and Bakersfield to one day. This comes on the heels of the reduction in transit times on about 1,000 U.S. shipping lanes in 2007.

"Next Day" Service on Cross-Border Freight

In September of 2007, USF Holland launched a guaranteed expedited next-day service for shipments arriving before 9 AM, noon or 3:30 PM. USF Holland followed this up with a claim that it is the first regional less-than-truckload (LTL) provider to offer time-specific Guaranteed Delivery before 3:30 p.m. between the US and Canada. “We have experienced an increased volume of shipping to and from Canada,” said John O’Sullivan, President of USF Holland, in a statement. “For shipments crossing the border, there is an increased need for speed and precision just as we have seen for domestic U.S. shipments. We are committed to matching the needs of our growing customer base. As such, USF Holland has tuned the process for shipments crossing the border so that our customers will receive the same speed, reliability and damage-free services provided elsewhere in our system.”

Service by noon and by 9:00, now offered within the U.S. domestic system of USF Holland, will be offered on cross-border service. The company said that all guaranteed and expedited services for this effort are backed by the USF Holland no-hassle, claim-free guarantee to be on-time and intact or no invoice will be sent to a shipper. FedEx Freight also has next-day cross-border service on its radar screen as it seeks to expand its business to its 11 terminals in Canada.

Next-day service is not a new thing. In fact, back in the mid-eighties, overnight service to Toronto was offered by selected carriers from major markets such as Chicago, Cleveland and New York City. What is different this time is the geographical scope of next day service. In the next blog, we will look at some of the other changes taking place in the expedited market.