For the past couple of months, we've warned shippers to brace for the perfect storm in transportation. Based on experience, we know that lots of shippers will ignore the warnings and proceed full steam ahead based on their belief that the perfect storm is a "future event."
When the nation's third largest carrier, JB Hunt, sends out a "Budget Guidance" letter to its customers advising them that "With the expected impact of these conditions (as described in the letter), we advise budgeting for rate increases that may reach 10% or more" shippers need to understand: The future is now!
Beyond the JB Hunt letter, there are other signs that the perfect storm will impact transportation budgets. For example, when the Internet Truck Stop Market Demand Index (MDI) is running at 42—as it was last week (to give you some perspective, during the capacity crunch of 2014 the MDI hit a high of 25), or when the rates in the spot market have hit a two year high, you have to ask: "Is my company prepared for this storm?"
If you're considering that question, then you need to understand: a) what is happening with transportation, b) how the storm can impact their companies and c) alternatives and capabilities that should be considered to mitigate the impact of the storm.
To help you prepare, we have some great news: TranzAct has opened its Perfect Storm Preparation Center! We have some great resources that you can use to understand what is happening in the transportation marketplace and the things your company needs to do in order to prepare for the perfect storm.
Here are some of the resources available at the center that can help you:
- Derek Leathers, the CEO of Werner Enterprises, gives his inside view of the strains facing carriers and shares best practices for shippers in the current market.
- John Larkin, Managing Director of Transportation at Stifel, and Jeff Rogers, CEO of Universal Logistics, share their insights about the magnitude of rate increases in the marketplace and how shippers can mitigate increases by working with their carriers. Of particular note is their observation that "status quo" shippers will pay 4% to 6% more than shippers who use effective sourcing capabilities.
- Noel Perry, Economist with FTR and Truckstop.com outlines the many reasons capacity is only going to get tighter as 2018 approaches.
- Randy Mullett, a Washington-based Trucking Expert provides insights on the impact of ELD enforcement and how to avoid disruptions in your supply chain.
- Yossi Sheffi, the Director of the MIT Center for Transportation & Logistics, and Jarrod Goentzel, Founder and Director of the MIT Humanitarian Response Lab, talk about how the hurricane recovery efforts will leave a lasting impact and why your company must have a supply chain disaster recovery plan.
- Dr. John Langley, Professor of Supply Chain Management at Penn State, and one of the most respected voices in the supply chain industry, explains the importance of scenario planning and why more companies should be doing it.
- Mike Regan, TranzAct's Co-Founder, talks with Mitch McDonald of Supply Chain Digest and in this video interview shares his insights about how shippers should respond to the current marketplace.
