Jack Cooper Holdings Corp., the 87-year-old transporter of cars and light trucks, is preparing to haul more vehicles as rail delays cause automakers in the United States to seek alternatives.
Trucking companies probably will raise their share of car hauling to 20% to 25% from as much as 15% now, CEO Michael Riggs said in an interview, though he did not give a timeframe.
Automakers will shift the work from railroads to “get a little less dependent on them,” Riggs said after an industry event held by Automotive Supply Chain magazine in New York late last month. “Trucking is going to have a disproportionate growth over the next coming years.”
With about 4,000 trucks, Jack Cooper Holdings ranks No. 37 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
Railcar shortages have caused delays in automakers’ shipments to dealerships as manufacturers seek to keep up with surging demand in the United States for pickups and sport utility vehicles.
BNSF Railway Co. said it will buy almost 1,900 double-decker railcars this year to boost car-hauling capacity, and Toyota Motor Corp. said it is creating storage space at two U.S. plants to prepare for rail shortages.
Rail delays are contributing to volatility for the trucking industry, which traditionally has depended on stable demand from automakers to plan routes and rig allocations, Riggs said. Daily levels have been swinging wildly for more than a year, he said.
“The combination of railroads, the weather and a stressed supplier base makes it where it’s very difficult to have — what I’ve seen forever — level production,” he said. “Rather than pray for it to come back, because it’s now into a solid year-plus trend line, that we’re just going to redesign the business for a new norm.”
The demands on truckers have spurred Cooper to invest in technology. The closely held company, whose transport service business is based in Kansas City, Missouri, is using a system that collects data and uses algorithms to maximize efficiency of each load and route, Riggs said.
The carrier also is developing an application like that of car-hire company Uber Technologies Inc. to build a network with a ratings system that will let users see all available routes and trucks.
Riggs said he is hoping to pool resources of the auto-transport industry, including individual truck operators. This way, his company won’t have to take on deliveries that cost more than the revenue earned, while automakers will see their vehicles shipped on time, he said.
“If somebody is going to be the technology leaders, it’s got to be us,” Riggs said.