Are Cargo Vans On The Way Out?
The cargo van has long been a staple of most expedited carriers' fleets. In fact, there are many who would submit that expediting, at least in its early days, grew through the use of the cargo van.
There has been concern among some cargo van owner/operators that their vehicle of choice is on a path to extinction or at least the amount of cargo van freight has been diminished.
Cargo van owner/operators contend, and probably rightly so, that their revenue has been impacted over the last few years, but many have determined that the smaller sized unit is still the best vehicle choice for their situation.
We're all familiar with the reasons for the popularity of cargo van operation - lower purchase price and cost of operation, less governmental regulation including the maintenance of logs and hours of service restrictions, drivability, etc.
From the customers' side: a shipper can pack a lot of small parts on 1 or 2 skids. Some expedited customers prefer vans because of perceived value; in spite of freight size-based tariffs, some customers are hesitant to have a larger truck transport their van-sized freight.
Loading and unloading times are usually faster with a van, and more often than not; vans have the speed limit advantage on the highway. This has resulted in the customer's perception that a van means a faster delivery.
One truckload carrier representative with a background in expediting says, "It probably surprises no one that the straight trucks stand a better chance of staying loaded and busy. Sure, vans have an important history in expediting; some would claim that the industry was built on the cargo van."
This topic is one that has been highlighted in previous articles. In 2000, in the pre-Sprinter van days, Expediters Online.com presented an article, "The future of vans in expediting", which addressed the same concerns of today's owner/operators.
At that time, the majority of the carriers surveyed on this issue said that cargo vans definitely would be part of the expediting picture for some time to come.
We explored the subject once again in 2003 and some of the carrier's comments included:
"I don't think shipping 1 or 2 skids will ever go away, because customers don't want to waste money putting the van-size shipment on a 24 foot truck."
"Many of our customers prefer vans."
"I think there will be a place for them because of the contractors who enjoy the non-regulation of hours of service inherent in a van. I believe there will always be van-sized freight, and the pricing structure is already in place for vans, so cargo vans have a definite niche. I don't see them as being a large revenue producer for the owner/operator, however."
A comment from 2003 is still applicable:
The cargo van, however, may be a victim of its popularity. As one expedited carrier puts it, "because a cargo van is the vehicle of choice for so many, this results in vans flooding the market and putting those owner/operators at a numerical disadvantage; too many vans for diminishing freight. As a result, the vans are usually the primary vehicle-size to be "frozen" in recruiting efforts."
Still relevant is this quote from a carrier:
"I think that's a somewhat cloudy look back, we had the smaller straight trucks back in the early days of expediting as well. If vans don't have the same level of freight or revenue as 5 or 10 years ago, one can attribute that to a changing economy, shippers and industry competition. It's all market-driven; if the expediting carriers get customer requests for nothing but cargo vans, that's the size of trucks they will populate their fleets with."
It's now three years since the last update and we felt it was time to pose the million-dollar question to a few carriers: "What's the future of cargo vans in expedite?"
"The cargo van business is still 30%-40% of what we do every day. It represents a significant part of our operation and when you think about the talk of companies moving away from a just-in-time inventory, it supports the need for the van model."
"You're always going to have those one or two pallets that are needed to keep that line moving, so the cargo vans are very much embedded in the future of expedite.
I don't see any decline in the demand for cargo vans."
"There will always be a place for the cargo van, but it will be a limited one. The size of your vehicle directly effects the size of your paycheck. For every one cargo van running for an expedited carrier, there are at least five who want to, so the competition is fierce and it becomes more fierce everyday."
"Cargo van owners are at a real disadvantage because every year, more people are retiring and many don't want to buy a straight truck, but a cargo van."
"The Sprinter is replacing the conventional cargo van in the industry. They do have an advantage because of their height, and the customers recognize this. They can stack freight higher and get their load in a Sprinter. For two years or so, customers have been asking for Sprinters by name. They know what a Sprinter is and what it can do."
"At Express-1, we have twice as many Sprinters as we do cargo vans because the Sprinter serves a dual purpose."
"The long wheelbase, high-roof Sprinter can serve in a 12-foot straight truck capacity. If our Sprinters haul a straight truck load and it meets 12-foot straight truck criteria, we'll pay them as a straight truck."
"From an economic standpoint, because of the fuel mileage the Sprinter achieves and with the fuel surcharges in place today, they get 'free' fuel while loaded. Because of the fuel savings, an aggressive driver can afford to chase freight, i.e. deadhead, in a Sprinter."
"The Sprinter, straight truck and tractor-trailer freight is growing, while typical cargo van freight has remained at the same level. There will always be the shipper with one or two skids, but the cargo van driver's success depends on geographic location. If you live in a major expedited freight city like Detroit, Chicago, Cleveland, etc., you'll make a living with regional or local runs."
VP of Services
FedEx Custom Critical
"I think there is absolutely a place for an Econoline or Sprinter-type of van."
"We still get a nice level of that business - people always have one or two skids to ship. We do not want to sell a customer a tractor-trailer when all they needed was an Econoline van. I would definitely say that there is a place for that type of equipment."
Tri-State Expedited Services, Inc.
"I don't think they're ever going to go away; there are still a few major accounts who utilize vans for expedite, but that market is limited.
"There's not as much need for cargo vans as people would like to think; half of the recruiting calls we take on a daily basis are people who want to run a cargo van."
"We're seeing more applicants with Sprinters. The Sprinter has been great for expedite, it gives the vehicle more versatility as far as covering freight."
Director of Recruiting
Nations Express Expediting & Logistics
"I think there's a future for vans at Nations Express. We've made the decision to go with the Sprinter van only; we're not taking on any of the conventional cargo vans at this time."
"Our vans get long-haul freight just like the bigger trucks and there's always shippers with the smaller loads of 1-3 skids. I'll always prefer a straight truck over the smaller truck, but you can always make a living with a van."