As we take a look at the possibility of a strike at our East Coast ports, higher accessorial charges from UPS and FedEx, and major changes ahead in LTL pricing, it begs the question: Are you planning for the future, or are you planning to fail?
Over the years, we've stressed the importance of scenario planning and continuously scanning the horizon to identify issues and threats that could impact your supply chains and freight costs. When you identify these issues, it’s important to take a look at possible supply chain threats and ask how they could affect different areas such as:
• Operations
• Costs
• Customer service
With that thought in mind, if you’re wondering what you should make time to plan for, here are a couple items we would recommend putting at the top of the list:
First, there is an increased probability that we will see a strike at our East Coast Ports on January 15th. The concern for this heightened last week when President elect Donald Trump signaled his support for the ILA and said port operators need to be smart about automation and protect American jobs.
Second, FedEx has announced a round of surcharges that they’ll be revising and that means increased costs for many shippers. For example, like UPS, FedEx will be going to a 40 pound minimum for over dimensional freight and doing things like charging fuel surcharges on accessorial charges.
The third item to plan for is how the upcoming changes to the NMFC in the LTL industry will affect the class of products being shipped and your freight costs. As we covered in last week’s Two Minute Warning, we’ll be hosting a webinar on this topic on January 9th at 11am Central and we encourage you to sign up.
We’ll have some great resources talking about the changes in the classification system and how it could potentially affect your freight costs. They'll also share ideas on how to manage and contain those costs in light of these significant changes.
One final thing we’re looking at is what’s going on in the truckload market. I bring that up because shortly after FreightWaves released their article announcing that the freight recession was over, we have in fact seen a significant increase in rates in the truckload spot market. In their recent interview with Derek Leathers, CEO of Werner, they highlighted that when freight rates in the truckload sector come back in 2025, they could come back with a vengeance. That is why we have recommended that now is the best time to look at conducting a TL sourcing event. We encourage you to get in touch with us ASAP so we can share some strategies that will help you have a successful sourcing event.
We can also provide great ideas and strategies to help you reduce LTL and parcel costs, or guidance and direction about how to manage though the potential East Coast port strike on January 15. Simply give us a call, send me an email, or set up a meeting on Calendly.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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