We all wish that good times would last forever and fear that bad times will never end. It’s common to acknowledge that “everything changes” while acting as if the current situation will last forever.
Why does this matter to shippers? Right now, freight rates are exceptionally low and every shipper has an abundance of carriers to choose from for their loads. However, these conditions won’t last, and it’s time to prepare for a carrier market rebound.
What can you do to be ready when the market moves the other way? Here are the most important steps.
Realize There Will Be Fewer Carriers
Poor freight rates and lots of competition isn’t good for carriers, and the vast majority of them are small operations with only a few trucks. That means the market conditions will cause quite a few carriers to leave the market, reducing competition — and your options.
How to prepare:
The best way to prepare is to ensure that you’ve chosen strong carrier partners and to treat them well. When the carrier market changes and your current partners have other options, you don’t want them to leave you behind for a better shipper.
Ensure that your dock teams are treating drivers well, providing accurate information, paying on time, and running operations as smoothly as possible. One of the best ways to do this is to collect reviews from drivers and find out what common concerns are showing up. Take steps to correct them, and watch your overall profile and reputation improve dramatically.
Be Ready for Higher Freight Rates
Rates won’t be this low forever, so while you enjoy what you have, be sure you’re ready for the future when things normalize. That means cutting costs and making your operation more efficient now, before it’s do-or-die.
How to prepare:
Optimize savings and lock in the best contracts you can with providers. Treat your employees well so that you retain them and don’t have to spend tens of thousands of dollars recruiting, hiring, and training a replacement.
Also, work on making your operation more efficient by improving automation and software solutions, fully training staff on how to use them, and reducing manual paperwork.
Not only will this make it easier for you to absorb increases, but it will also make your facility a preferred partner for carriers, which can help you in rate negotiations.
Keep an Eye on Labor Concerns
At the time of this writing, there is a tentative labor deal in place for the International Longshore and Warehouse Union and the Pacific Maritime Association, but UPS is poised to go on strike. These labor concerns can impact production speed from your suppliers and stock movement throughout the supply chain.
How to prepare:
You don’t necessarily have control over labor issues, but you can diversify your own supply chain to minimize the impact of a strike. For example, ensure that you’re not just using one shipper or company for both inbound and outbound freight.
The more you diversify your suppliers and carriers, the more nimble you will be when labor issues cause slowdowns or disruptions. You’ll also be less impacted by a change in a specific company’s rates if you are working with multiple partners.
Change is Constant
We love it when things stay the same because it’s predictable and easy to plan for. Unfortunately, that’s not the reality we live in.
The good news is that by being forward-thinking and preparing for shifts in the market and labor concerns, you can position your company to feel less of a negative impact. That starts with being aware of how your facilities run.
To get the real story, solicit driver reviews at your facilities using Dock411’s QR code placard. The feedback you get is highly valuable and can help you make critical improvements to your operations. Even better, Dock411’s facility profile allows you to answer common driver questions without a phone call that interrupts your staff.
Interested in learning more? Contact us today to find out how a facility profile and driver reviews psoitions you to effectively ride the waves of a changing market.