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What Is a Shipment, By the Numbers

Author pacejet on 4/5/15 8:46 AM

With the day to day challenges that most shippers face, it's sometimes difficult to look outward and monitor broader shipping trends. For today's post, we thought we'd take a closer look at the characteristics and content of shipments across a range of industries and business types. With major forces like e-commerce, globalization, or lean / just-in-time inventory driving change, it seems intuitive that we'd be shipping more often and to more places. What do the numbers show?


Shipping to More and More Varied Destinations

Whether you ship to businesses or consumers, your ship-to destinations both inside and outside the U.S. have changed quite a bit in the last two decades. Over the last 20 years the U.S. population has grown 25% to 312 million people and households are up 27% to 119 million. During the same period, businesses are up 19% to 7.4 million while government units increased 53% to 89,000. Overall GDP has increased 68% in real / inflation-adjusted terms over the last 20 years and foreign trade has doubled.

Average Shipment Ranges from 20 to 1,345 Miles

Average miles per shipment varies widely depending on the manufacturing (700 miles in an average shipment) or distribution (386 miles in an average shipment) orientation of business but there is also significant variation by type of product. Apparel manufacturing tops the list with an average of 1,345 miles per shipment. Computer and electronic product manufacturing comes in at second place with an average of 1,175 miles per shipment. Flip the rankings upside down and you see that commodities such as fuel (20 miles), beer and wine (44 miles), mining (46 miles), lumber (99 miles), and grocery (122 miles) dominate the short distance shipments.

Balance of Wholesale Trade and Manufacturing

Interestingly enough wholesale trade (NAICS 42) and manufacturing (NAICS 31-33) categories are fairly balanced with roughly $5.7 Trillion in shipment value for each. At the top of the value list for the 4-digit SAIC level includes petroleum products, chemical manufacturing, transportation, and food manufacturing. Flip the ranking upside down for lower-value of goods and you find leather, apparel, textile, and fuel right below newspapers and furniture.

Smaller Shipments, Higher Value, More Frequency

Start comparing value, miles, and product types and patterns we've been debating over the last few decades hold up in the numbers. Shipments 500 lbs or less grew 56% since 1993 and increased in value. Large shipments of 50,000 lbs or more continued to represent the largest ton-miles across the transportation network, but smaller, higher-value, faster shipments continued to grow the fastest. As businesses pursue lean inventory and production strategies that reduce carrying costs and consumers demand high-speed e-commerce fulfillment, we can expect these trends to continue in the near future.

Shippers Need Choice More Than Ever

With businesses and consumers alike continuing to press for smaller shipments, delivered faster, but only just-in-time, business shippers need carrier and service choice more than ever. Strategic carrier relationships are certainly key to maintain service levels and ensure available capacity, but establishing new carrier relationships, trying out new services, and comparing alternatives will be key to maintaining profit margins as overall shipping cost per weight increases. Now might not be the time to try out drone-delivery of shipments, but in the face of long-term shipping trends it could be a good year to try out some new carrier and service options to improve your bottom line.

For More Research

If you're interested in more research, the Department of Transportation has some great reports that formed the foundation of this post. Here are a few links to get you started.

To Learn More About Pacejet

Call Pacejet at 877-722-3538, email us at info@pacejet.com, follow @pacejet on twitter, or visit our website pacejet.com for more shipping solution ideas.

Topics: Articles, Strategy

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