The 2:00 Minute Warning

BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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Last week the DAT Load Board had over 10 million loads posted on it. That tops the biggest week they ever had in the past, which was in June of 2018, by about 42% and is – brace yourself – 174% higher on a year over year basis.

As we have warned in prior Two Minute Warnings, the Code Red conditions in the freight markets are putting supply chains at risk!

When you read articles about companies like Peloton spending an extra $100,000,000 to keep their supply chain moving, or other companies that have either had to curtail production, or who run the risk of experiencing significant disruptions, you know that bad things happen when your supply chains start to buckle.

And one of those things is having to constantly be operating in a reactionary or fire fighting mode. For example, when I asked a friend who has a huge freight budget (hundreds of millions in freight spend) whether they were having any trouble with capacity being this tight, he responded: “Not at all. I just have to pay the outrageous rates it takes to get the freight moved!”

Two weeks ago the Journal of Commerce had their annual TPM Conference. I was on an outstanding panel that discussed what shippers should expect to see in 2021. Greg Orr from CFI, Holly Pearce from Agway, and Tom Schmitt from Forward Air, offered some very interesting insights. Add it all up and the asset based carriers are seeing one of the strongest years on record in the freight markets. Our moderator, Bill Cassidy, wrote a succinct article about what was covered during the panel discussion.

JOC also provided a short video with comments from Greg Orr (CEO of CFI) about turning down roughly 3000 loads a week. I know you are busy but you need to check out what he says.

As I noted during the discussion, 2021 is likely to be a challenging year for shippers for several reasons. As we addressed in our Code Red webcasts, inventory restocking issues are not going away anytime soon, carriers are not planning any major expansion in capacity, and finding enough truck drivers will continue to be a challenge. And Holly Pearce from Agway noted that in 2020, there was uncertainty about whether the increased demand for goods was temporary. Now as we move well in to 2021, and as people slowly return to pre-pandemic activities, there has not been a significant drop in consumption, indicating that we might be seeing a shift in purchasing patterns that’s ongoing.

The TPM Conference was truly exceptional and featured sessions with very valuable information. So if you want to hear from the experts and get an in depth understanding of what is happening in the freight markets on a global and North American basis, our friends at the JOC are making all of this valuable content available here. And if you use the code "OTR", you’ll get a nice discount.

In closing, there are things that shippers can do to minimize the possibility and the risk from their supply chains buckling and causing disruptions. The first thing shippers should do is to read TranzAct’s eBook How to Create A Transportation Spend Management Plan. Now more so than ever, in today’s freight environment, the old adage is true: If you don’t have a plan, you are planning to fail!

If you have questions or want more information about how to write that plan, talk to us about TranzAct’s proprietary Rapid Assessment process. It has proven to be an effective tool in identifying the issues and challenges of today’s environment and the strategies and processes you can use to keep your supply chains running smoothly.