In the latest of many trucking company acquisitions, J.B. Hunt Transport has jumped on the bandwagon with its recent acquisition. This trucking carrier has acquired Special Logistics Dedicated in hopes of boosting its intermodal services. The reason has everything to do with the middle mile. Find out what this middle mile is all about and how J.B. Hunt will increase trucking jobs and routes with intermodal service.
What is the Middle Mile
The middle mile in logistics is the route from a warehouse, port, or manufacturing facility to the distribution center located nearest to customers. Examples of the distribution point may be an e-commerce distribution center, such as those for Amazon or online retailers. It could also be the shipment distribution location for LTL trucking lines. Why is the middle mile becoming so valuable?
E-Commerce Hits Its Stride
One hyphenated word—e-commerce. This segment of the logistics chain is booming with more people shopping online than ever before. According to Fortune, online shopping has increased to the point where more than half of the US population shops online. In a survey done in June 2016, 51 percent of online shoppers made at least two online purchases within a three-month period.
Plus, 44 percent of online shoppers are making purchases using their smartphones. The US Census Bureau also reports that home goods delivery via e-commerce has gone up 15 percent just in the last year to a value of $394.9 billion. That’s no small change, and trucking companies like J.B. Hunt understand the value of finding a way into this niche.
Take a look around you and consider how many people are carrying a smartphone in comparison to five years ago. Those same technophobes who were anti-smartphones will soon be adding to the online shopping trend. All of this shopping at the click of a cell phone button means one thing for trucking—increased demand for middle mile services. These middle mile services will transport freight between cities and localized distribution points so that goods will be one step closer to the customers who want them.
J.B. Hunt’s Acquisition
So where does the middle mile fit in with the acquisition of an intermodal fleet by J.B. Hunt? According to J.B. Hunt President and CEO, John Roberts, “This acquisition will allow our customers to deploy ‘big and bulky’ inventories into key markets, improving order fulfillment times for final-mile deliveries and further enhancing our e-commerce delivery capabilities.”
The acquisition, at a cost of $136 million, will add 14 trucking terminals and distribution fulfillment facilities to the J.B. Hunt line. Additionally, J.B. Hunt is increasing its fleet by 850 units of equipment to help fulfill intermodal freight services. By moving toward middle mile services, J.B. Hunt is also helping to ease another growing pain in the trucking industry.
Third-party logistics teams and freight brokers have previously dominated the middle mile. They have upped the cost of middle mile freight by jacking up the expense of arranging these deliveries between LTL and local trucking companies.
Long-Haul Trucking Companies Gain Middle Ground
Thanks to trucking companies like J.B. Hunt who are getting into the middle mile market, operating costs for handling this freight will hopefully decrease. Or at least that is the goal, and by reclaiming this middle mile, J.B. Hunt with its expansive service and shipping capabilities are in a good position to do so. For truck drivers hoping to find a trucking job in intermodal, now is the perfect time to apply for a position at J.B. Hunt Transport.