Fuel prices, persistent economic volatility, and regulatory compliance demands are just some of the stressors affecting the trucking, shipping, and logistics industries. Frank Matarazzo, CEO of Fusion Transport, points to the Retail Consolidation Model as a strategy that could help alleviate those pressures by combining shipments, reducing expenses, and positively contributing to sustainability goals.
RUTHERFORD, N.J., Oct. 7, 2024 /PRNewswire-PRWeb/ -- High operational costs due to unrelenting inflation continue to chip away at profit margins for the trucking industry. Policy changes, including new environmental standards, labor laws, and taxation, are constantly in flux. There's uncertainty surrounding regulations that could affect freight rates and fleet operations, particularly as carriers prepare for future compliance deadlines, with this year's U.S. election creating expectations of potential shifts in the near future. In this context, Frank Matarazzo, owner and CEO of Fusion Transport, asserts, "Retail Consolidation is a win-win-win for retailers, suppliers, and logistics providers." He explains, "Retail Consolidation is a system where multiple suppliers in a market combine their shipments into full truckload quantities for delivery to retailers. It's like carpooling for freight — suppliers can purchase more efficiently by reducing shipping costs, retailers receive fewer shipments at their docks, and logistics providers secure a better rate per mile".
A Cost-Saving Strategy for Small Trucking Businesses Amid Tech Pressure
Logistics companies are under increasing pressure to adopt advanced technologies like automation and AI to remain competitive. While these innovations can optimize routes and improve efficiency, they require significant investment, making it challenging for smaller operators to keep pace.
A key example is the integration of autonomous vehicles (AVs), which remains a contentious issue in the logistics sector. Proponents highlight the safety and efficiency gains, citing millions of miles driven by autonomous trucks without fatalities. However, critics emphasize the technology's vulnerabilities, such as hacking risks, software glitches, and the need for human oversight to prevent catastrophic failures. These concerns underline the importance of strong regulations and transparency to ensure public trust in AV technology. (1)
As companies adopt these costly technologies, models like the Retail Consolidation Model offer a critical advantage by lowering transportation expenses. By combining shipments from multiple suppliers into full truckloads, logistics companies can reduce costs and improve efficiency, helping them stay competitive without needing to overhaul their entire operational structure. This approach provides a practical solution for operators looking to optimize their supply chains while managing investment challenges.
The fact is that the trucking industry is primarily composed of small businesses, with 95.5% of carriers operating ten or fewer trucks. (2) Matarazzo notes, "Traditional LTL uses a hub-and-spoke system, where shipments go in and out of terminals as they move across the country. Retail Consolidation is more like a direct flight. Cargo goes straight from the origin to the destination without multiple stops." The subsequent cost savings puts trucking companies in a better position to adapt to economic downturns and fluctuations in freight demand.
Facing Driver Shortage and Cutting Costs in the U.S. Trucking Industry
Retail Consolidation enables fewer movements of smaller shipments. Instead of transporting small shipments multiple times, this model consolidates them into larger loads, reducing the number of movements required. As a result, fewer trucks and drivers are needed to move the same amount of freight compared to using traditional LTL carriers.
This model is particularly valuable as the U.S. trucking industry faces a severe driver shortage. According to the International Road Transport Union (IRU), the share of drivers under 25 remains low at 12% or less. (3)
This statistic highlights a critical issue: the industry is struggling to attract younger drivers to replace an aging workforce. With fewer young drivers entering the field, the industry faces an ongoing challenge in maintaining a sufficient driver pool. By consolidating shipments, companies can mitigate some of the pressure from this shortage, ensuring more efficient use of available resources while helping to lower transportation costs.
At the same time, by optimizing routes and reducing the number of trips required, Retail Consolidation can help reduce carbon emissions, aligning with sustainability initiatives. This may allow companies to meet industry environmental standards more easily while also benefiting from cost savings related to fuel consumption and fewer miles traveled.
Revolutionizing Logistics with Cutting-Edge Retail Consolidation Model
Technology is pivotal in planning and optimizing freight movements. The ability to manage logistics more efficiently through advanced software helps companies stay competitive and adapt to evolving industry standards. This technological integration is essential for small businesses that might otherwise struggle to keep pace with larger players in the logistics industry.
Fusion Transport is one of only four companies in the U.S. that follow the Retail Consolidation model, with warehouses across the contiguous United States. Its Fusionchain technology offers logistics solutions with built-in visibility, linking shipping, storage, and supply chain systems into one unified dashboard with real-time data. The company provides warehousing management for customers but does not require them to warehouse as part of the next generation of LTL. By bypassing traditional warehousing requirements, Fusion Transport accelerates delivery times and reduces costs, minimizing handling and storage needs.
Matarazzo attests, "Retail Consolidation can save days in the delivery process. This approach ensures smoother retail operations and optimized supply chain efficiency. Fusion Transport reduces or even eliminates penalties from large retailers for late delivery through advance load planning and technology, resulting in improved on-time performance and reduced working capital through cycle-time improvements."
About Fusion Transport
Freight industry visionary Frank Matarazzo responded to the complex challenges of shipping logistics, consumer demands, and the need for advanced supply chain solutions by creating Fusion Transport. Emerging from two third-party logistics brokerages and based in Rutherford, NJ, Fusion Transport has become a pivotal force in Retail Consolidation and is now a leader in technology-driven freight management solutions. With over 40 years of expertise, the company is revolutionizing the North American less-than-truckload (LTL) network through a technology-based approach that not only meets market demands but also reduces the inefficiencies typically seen in traditional LTL carrier networks. This innovative strategy offers a more streamlined and cost-effective option for shipping merchandise in LTL quantities across the country, epitomizing the disruptive, customer-focused ethos of Fusion Transport. For more information, visit their website at https://www.fusiontransport.com/.
References:
1. Taube, David. "Truckers, AV Advocates Present Conflicting Views on Self-Driving Safety." Trucking Dive, 15 Aug. 2024, truckingdive.com/news/artificial-intelligence-arpa-i-risks-opportunities-autonomous-vehicles/724166/. Accessed 24 Sept. 2024.
2. "Ata American Trucking Trends 2024." American Trucking Associations, trucking.org/news-insights/ata-american-trucking-trends-2024. Accessed 20 Sept. 2024
3. "Worse than You Thought: Truck Driver Shortages and Demographics." http://www.iru.org, International Road Transport Union (IRU), 4 Apr. 2024, iru.org/news-resources/newsroom/worse-you-thought-truck-driver-shortages-and-demographics.
Media Contact
Karla Jo Helms, JOTO PR™, 727-777-4629, [email protected], jotopr.com
SOURCE Fusion Transport
Share this article