By Matthew Harding | Vice President, Freight Market Intelligence, Chainalytics
Daily chaos, loosely committed capacity from truckload carriers, missed budgets are simply the norm when you are a shipper dealing with transportation needs of your organization.
Striving to keep customers satisfied, plants running with flowing goods and raw materials is a never-ending battle that requires patience, perseverance and all out stamina.
We’ve all heard it: “Just ship it from point A to point B – can’t be that hard? What’s the problem? “
When I explain to people who know nothing about truckload markets, what it is like to work in this space, it goes something like this:
Imagine you commit spending exactly $100 million a year to the CFO of a large multi-billion company:
- You have to rely on hundreds of trucking firms to hit this target.
- You do it one shipment at a time.
- There are over 100,000 shipments from January to December.
- You have no idea if you will hit the target because most major factors that negatively affect the outcome are 100% completely out of your control.
- And if you exceed the budget – no annual bonus for you!
That’s just the plan … then reality hits.
Many times at the end of the day – sometimes for weeks on end – loads are not covered and sit idle because there is no carrier with a negotiated rate to take the load. Customers are not satisfied.
Why would this happen? There are a myriad of reasons why shipments are missed at the end of the day. Poorly coordinated promotions from marketing can lead to a huge unexpected need for trucks, changing large vendors with short notice leaving lanes uncovered, strong produce seasons that sap trucks to growing fields, snow, hurricanes, etc., etc. – the list is long and extensive.
When faced with no cost effective options, you have to call carriers and brokers for help and they charge more for the rapid response (they hear the trembling in your voice) – all while skepticism about your abilities only grows – both from customers and your senior management teams.
By this time, the person is glad they chose another career (but never look at transportation the same way) and while my characterization is a little overly dramatic, I think many companies maintain highly reactive transportation procurement plans and use their relationships to weather the capacity storms that always seem to come out of nowhere.
Tight Transportation Capacity?
It’s Really More of an “Us” Kind of Problem.
The bigger question: how to convey to concerned parties the fact that when your transportation capacity is limited, it is often limited for everyone.
Giving shippers and 3PLs the necessary information to improve how their organizations understand the market is a big part what we do at Chainalytics with our Freight Market Intelligence Consortium (FMIC).
With well over $27 billion in transportation data across 250 subscriptions consisting of relevant market research, rate trends, carrier reporting, visualization technology and benchmarking capabilities, FMIC provides our customers with an abundance of information that enhances their knowledge of transportation markets and provides a sound resource to call upon when times get tough and they have to explain what happened.
We can’t stop the influence of nature and global economies on trucking capacity, but we can certainly minimize some of the pressure with proven insights – as a shipper or 3PL, your job has enough pressure already.
Matthew Harding is Vice President of the Freight Market Intelligence Consortium which currently provides 230 subscriptions of transportation rate benchmarks and business intelligence to over 150 shippers and 3PLs globally.