Code Red Conditions Mean Make Changes Or Pay More to Move Your Freight
May 5, 2021
With Code Red conditions in the transportation marketplace, shippers are faced with a new reality: They need carriers more than carriers need them! And that is why we have used these Two Minute Warnings to help shippers navigate the impact of the changes they are experiencing in their carrier relationships.
For example, in previous Two Minute Warnings we have highlighted the fact that the carriers have more data than ever so they know how much space your freight is taking and how much time it takes to handle that freight. Why is this so important?
In the past, when there was a buyers market, shippers could get away with having inefficient operations or practices even if the carriers didn’t like those inefficiencies. After all, they needed your business. In today’s sellers market, the carriers no longer have to accept those inefficiencies, or can charge a premium (via accessorial charges) for having to deal with these inefficiencies. In today's market where carriers are flush with freight they can be much more selective about who gets their equipment. What does this mean for shippers?
If you want to run docks that are inefficient, you’re going to have higher rates and pay more money.
If you spread your freight over 15 or 20 carriers, you’re going to have higher rates and pay more money.
If you expect your carriers to routinely pick up one pallet of a minimum charge shipment, brace yourself because your operating ratio data will look awful – and so will your freight rates.
And if shippers want to extend payment terms, the carriers will make sure that the cost of financing those extended terms will get built into your rates and you’ll pay more overall.
Now some of you may be listening to this and thinking, “Mike, I hear you but I don’t have the power to make the kinds of changes that will help our carriers.” If that is the case, then you need to sign up for our "Grab a Seat at the Table" webinar we will be hosting next Tuesday with our friends from CSCMP and NASSTRAC.
Why is this webcast so important for you and your career? Because we have an outstanding panel of resources who in fact, “have a seat at the table!” They will be sharing their experiences and insights about how they regularly communicate the impact of important transportation issues in the board room and amongst their C-Level executives.
I know you’re busy, but you need to carve out one hour – one hour is all we are asking, so that you can hear from:
- Bruce Ridley, SVP EH&S and Operational Services, Packaging Corporation of America
- Antonio Galvao, VP Global Logistics & Distribution, Tenneco
- Matt Ehlinger, Vice President Transportation, NCH Corporation
If you sign up and find you’re not able to make the webinar, no sweat, we’ll send the recording to everyone who registers.
More so than ever before, transportation, logistics and supply chain professionals need to have a seat at the table where decisions are being made that impact your company’s freight costs. It is very important to be able to communicate up the ladder, especially in times like these when freight budgets are going through the roof and companies are experiencing massive supply chain challenges. So we encourage you to take advantage of hearing what our panel has to share and invite others who could benefit.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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