It has been an interesting year for the transportation market. The freight market appears more tepid than the general economy. In addition, the U.S./China trade discord has led to inventories being pulled ahead and has distorted the true freight market picture. Shippers and carriers alike are uncertain what is to come and the transportation market is changing as a result – through more available capacity.
As capacity has increased over the last few months, shippers are starting to gravitate back to cost driving the purchase decision. Yet strategic shippers know there is more to making the right transportation decisions, which cost is a factor, but not the sole component. The transportation market is cyclical and disruption drives capacity availability and cost.
"We're following the mantra we had when times were bad and focusing on being a shipper of choice. We're sticking with the people who stuck with us [in 2018]. This is a cyclical industry, and relationships matter."
John Janson, Global Logistics Director, SanMar
joc.com article, "US trunkload pricing battle heats up," July 17, 2019
While we’ve been enduring the uncertainty over the last few months, disruptions have started to mount that are going to continue to affect the market:
It’s important that shippers consider all of these disruptions and the potential of what’s to come. If shippers flock to cost, the consistency and investment into carrier networks significantly decreases. The result will be less elasticity in the market and much less carriers available when shipper demands resurface.
The most important thing shippers can do in this market is to diversify their carrier base and transportation modes to obtain and keep long-term capacity at fair, market-driven costs. To work with Schneider, email email@example.com, or call 800-558-6767.
Published August 2019
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