Small to medium-sized businesses typically don’t hold formal bids over annual cycles on their projected transportation requirements. However, this doesn’t mean they should blindly award freight to whatever the carrier is the flavor of the week. They need to ensure, beforehand, their freight needs are covered by well-vetted and qualified service providers. The following are some ideas on what should guide conversations between these types of shippers and their prospective transportation providers.
Plan against market uncertainty with flexible decision making
Especially over the past few years, the truckload market has been difficult to get an accurate reading on. Three years ago, one could hear that two years ago was when the market would strengthen. That wasn’t the case. Two years ago, one could hear that a year ago the market would finally turn the corner. That, again, wasn’t the case. A year ago—well, the point’s been made. Every stakeholder has a magic crystal ball sitting at their desk, just waiting to be asked their opinion on when the market will boom again. However, it’s still dormant. The market remains oversaturated with capacity and freight rates haven’t stimulated in a meaningful direction for some time. It’s been a purgatory of sorts.
At first glance, this would seem to be goods news for small to medium-sized shippers. Afterall, an abundance of capacity generally keeps rates from increasing. However, the reality is not that ideal. A lumbering market is exhausting for all parties involved. There are ghastly suspicions behind the causes of its lull. Could it be inflation? From what I hear, the economy hasn’t been too hot. Of course, maybe that’s why our sales have been down since they are fears of inflation, that makes sense, right? Many anxious shippers have murmured to themselves.
The uncertainties behind the prolonged lapse in the trucking market can only be surpassed by the inability to explain when it will finally turn for the better. As 2025 approaches, so does the assortment of speculations over trucking’s performance over the course of the new year.
While it’s in the interest of shippers to monitor what analysts are forecasting, the main takeaway that needs to be stressed: control what can be controlled. Shippers shouldn’t make rash decisions regarding freight off what’s being predicted in the market. Rather, they should confide their uncertainties with trusted service providers as the new year approaches. The two sides can build out a strategy that addresses speculation or concern if they actually become realized down the road. This makes freight decisions flexible, adaptable to the market in the event that it shifts.
Analyze yearly freight spend, identity cost inefficiencies
In intimate connection with the strength of the market are freight rates and other related transportation costs. Price is usually the first thing on a shipper’s mind so an understanding on how rates will develop over a certain period of time is valuable information. However, just like the overall market, this is difficult to read.
The closest way for shippers to understand the future is by looking at the past. In the weeks leading up to 2025, they should analyze their freight spend in previous years and compare it year-over-year. This can reveal trending inefficiencies, such as gradual increases in particular expenditures.
Learn about the “A” in ENABLE. Analyze how your money is being on freight today.
Armed with this understanding, shippers can make informed decisions to lower their freight spend. In other words, they aren’t disillusioned that cheaper rates in 2025, something they have little control over, is the only way to save them money they otherwise lost in 2024 due to unidentified inefficiencies.
Start the conversation about 2025 service as soon as possible!
While most New Years’ resolutions begin Jan. 1, if shippers are serious about starting the new year with reliable and trusted service providers, the process should begin well-before the calendar flips over.
For a strategy which encompasses the topics above to be effective, comprehensive discussion with a trusted service provider is required beforehand.
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