There are no dominant carriers in the US. So in tough times, like now, they will scrap for declining volume and…
There are no dominant carriers in the US. So in tough times, like now, they will scrap for declining volume and keep prices down…this is good for shippers…not good for carriers. McKinsey did an analysis that shows the depth of the problem (see below) that is directionally correct as everything scales down except fixed costs. Result = losses.
Contrast this with the parcel market. Prices are going up as volume increases. There is another pressure on cost:
- Covid has closed off a lot of business accounts
- Business deliveries cost a third of the cost of a home delivery (Source: Trevor Outman)
Parcel is a disciplined 2-major player market allows the players to increase cost!