As spot rates decline and capacity relaxes, many carriers are looking for ways to optimize their operations to weather a market downturn. Additionally, carriers are working to take advantage of these changes.
The answer for both shippers and carriers may lie in technology.
The technology needs of companies throughout the supply chain are changing, but that doesn’t mean your current tools are useless. Existing solutions aimed at optimizing cargo movements may transition from rate negotiation tools to relationship building tools during this time, helping companies demonstrate relational consistency and ensure service levels remain high.
“COVID caused so much uncertainty in the transportation business,” said Winnie Barton, Logistics User Experience Manager for MegaCorp. “Post-COVID, we are starting to see a more stabilized market, with our carriers looking for cost savings after a couple of crazy years.”
While pricing power is shifting to carriers as the market balances out, the industry will still see the usual seasonal spikes in the fourth quarter as companies prepare for consumer demand to rebound. before winter break.
As operators are reaping the short-term rewards of this seasonal increase, they need to keep long-term trends in mind when engaging with partners. This year’s peak season could provide carriers with the perfect opportunity to strengthen relationships with carriers heading into the new year, securing more consistent, higher-value freight as the market continues to loosen.
“Shippers need to make sure they are constantly building relationships with third-party logistics providers and carriers to help them find capacity,” Barton said. “They need to work with 3PLs that have the technology that can help them keep their trucks moving. We are capable of doing that.”
While focusing on building relationships may seem more important to shippers right now, Barton noted that shippers should also keep in mind that while technology is important, this is a relationship-driven industry and it’s important to balance technology. with a good quality service. When one segment of the supply chain suffers, all segments are ultimately affected, perpetuating the cyclical nature of the freight market.
“With the cost of operating a truck and the high price of diesel, it’s a tough time for shippers,” Barton said. “Carriers going out of business can create higher prices for carriers. It is important to think that, whenever there are difficult times for carriers, at some point or another the market will change”.
The key to using technology, including cargo tracking and comparison tools, to build stronger partner relationships lies in using the solutions to complement more human-centric practices, not replace them entirely.
“There’s a bit of concern in the industry that implementing technology takes away the service element of working with the customer,” Barton said. “We can do a good job of prioritizing both. Carriers should expect to see many more 3PLs using the technology to their advantage.”
MegaCorp partners with Trucker Tools to integrate tracking into its proprietary TMS. The company also uses Smart Capacity to automatically post loads and allow in-network carriers to view cargo before it is posted to external platforms. In this way, the company uses the technology to reward its loyal operator partners.
Ultimately, technology will prove crucial to efficient communication between players as the industry returns to the rhythm of contracted fees and consistency. Carriers and shippers alike should strive to partner with companies that offer modern technology solutions, as these tools will help both parties navigate market gyrations, strengthen relationships, and generally thrive in the face of uncertainty.
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