As spot rates decline and capacity loosens, many carriers are searching for ways to optimize their operations in order to weather a market downturn. Additionally, shippers are working to take advantage of these changes.
The answer for both shippers and carriers may lie in technology.
The technological needs of companies across the supply chain are changing, but that does not mean their current tools are useless. Existing solutions aimed at optimizing freight movements may shift from rate-negotiation tools to relationship-building tools during this time, helping companies prove relational consistency and ensure service levels stay high.
“COVID caused so much uncertainty in the transportation business,” MegaCorp Logistics User Experience Manager Winnie Barton said. “Post-COVID, we are starting to see a more stabilized market, and our shippers are looking for cost savings after a crazy couple of years.”
While pricing power is shifting toward shippers as the market balances out, the industry will still see the usual seasonal spikes in the fourth quarter as businesses prepare for consumer demand to pick up ahead of the winter holidays.
As carriers are reaping the short-term rewards of this seasonal upswing, they should keep long-term trends in mind when interacting with partners. This year’s peak season could provide carriers with the perfect opportunity to strengthen relationships with shippers going into the new year, securing more consistent and higher-value freight as the market continues to loosen.
“Carriers need to ensure they are consistently building relationships with third-party logistics providers and shippers to help them find capacity,” Barton said. “They need to be working with 3PLs that have the technology that can help them keep their trucks moving. We’re able to do that.”
While focusing on building relationships may seem more important for carriers right now, Barton noted that shippers should also keep in mind that while technology is important, this is an industry built on relationships and it is important to balance technology with good quality service. When one segment of the supply chain suffers, all segments are eventually impacted, perpetuating the cyclical nature of the freight market.
Read more: FreightWaves