How Volatility is Impacting Freight Budgets
Aug 26, 2020
Based on recent conversations we've been having with shippers, senior executives from several truckload and LTL carriers, and numerous financial analysts, there is one thing that everyone agrees on: There is tremendous volatility in the transportation marketplace.
For example, April was reported to be one of the worst months for motor carriers in 26 years. Four months later we are seeing much higher demand and spot rates in certain traffic lanes are running at historic highs. As we noted in a recent Two Minute Warning, there is also tremendous volatility with ocean rates, and when you see both FedEx and UPS imposing surcharges on their largest volume shippers, it’s obvious that this volatility is not just limited to one or two sectors of the transportation marketplace.
A friend of mine who has had an extraordinarily successful career in business likes to remind me that volatility is something that can be seen as a problem or an opportunity. It all depends on your perspective and whether you have a plan to manage and take advantage of the volatility.
At TranzAct, we can help you take advantage of the volatility. So as you work on your freight budgets for the year ahead, instead of seeing this volatility as an impediment to creating a solid plan, we encourage you to pause for a moment and consider some great resources that will help you understand how the current changes can be beneficial for your company - especially if it helps you beat your competitors.
If you want to use this as an opportunity, here are some great resources for doing that:
Read our Transportation Spend Management eBook to learn what factors inside your organization influence your costs, what levers you can use to make changes, and how to quantify the impact.
Attend a webinar that our friends at the NIT League will be hosting in early September with Jeff Tucker about what’s happening in the truckload sector.
Give us a call and talk to us about our Rapid Assessment Process. During this process we evaluate your current state, define your ideal state, and create a road map for getting there.
Check out a new source for global ocean data "Estimates of World Seaborne Trade in Real Time" developed by the United Nations to track trade flows around the world. This resource was created to help gauge and predict trends, and is updated weekly.
Look at the McKinsey's research in US freight after COVID-19: A bumpy road to the next normal, which features different charts intended to put things into perspective.
Sign up for the CSCMP Edge Annual Conference starting on 9/20 if you haven’t already. We’ll be hosting a session called "Grab a Seat at the Table" on 9/22 at 2pm Central featuring lessons learned from three senior executives.