By Paul Nesbit, Account Manager, ALC Des Moines
Why are the rates so high? Where are all the trucks? When will it go back to normal?
All modes of transportation have been struggling to find these answers, the light at the end of the tunnel so to say. But the reality is we don’t have these answers. The last year has been challenging for obvious reasons, and as the containment of the COVID-19 outbreak continues to progress, so does the demand for transportation capacity.
How do we continue to service our customers, source capacity, and stay profitable all at the same time? Is that even possible? Yes, it is. And it boils down to a better understanding of the market, drivers, and communication.
The usual conversations between brokers and customers are focused on load details, commodities, quantities, temps, ready dates, and so forth. But, why not also discuss the market conditions related to bigger picture items? Information is a powerful tool for productive decision making and for educating our fellow supply chain members. We can work together to share insights and forecasts too!
As the gap between truck supply and freight demand continues to spread, most of us can attest it’s the tightest truck market in decades. Couple that with a driver pool which continues to age due to more drivers retiring while fewer drivers enter the workforce, and we all face an extremely fragile market.
Carriers are doing anything possible to help combat this issue and get drivers in the seat. We hear of this from our carrier partners every day. We also find that the small to midsize carriers are more successful in growing their fleets than the larger players as it’s easier to go from 5 trucks to 10 than it is from 50 to a 1,000.
At Allen Lund we are blessed that our core carriers fall into this category as it allows us to keep up with our customer demand in a way their asset pools cannot. All too often we find ourselves in a position of wanting to fulfill a buyer’s need for transportation and an obvious lack of supply that fits all of their freight parameters. Whether that be finding capacity within their vendor’s allowance, or finding a truck within the allotted freight spend that’s also able to deliver the load by the desired arrival time. This is a great time for honest communication and education about how to work together in this challenging market.
Maybe the buyer is willing to sacrifice price in order to keep a timeline or vice versa. Maybe there’s an ad and we need to make it happen, or maybe there is enough inventory on hand to tide them over until next week while we shop for better pricing. Unfortunately, with perishable shipments, time is of the essence. If we can’t find flexibility on load dates, maybe next time we can increase the lead time.
Anticipating continued driver shortages and elevated consumer demand as the world opens back up from the coronavirus will be key to staying ahead of the always hectic produce season. Buyers, brokers, and transportation managers will all benefit by being more comfortable talking about freight spend and capacity restraints. A wise man once said that there’s no hill for a climber.
We are all in this game together. Communication on market trends and drilling down to prioritize our freight will help us get through this as we establish the new norm in transportation.
Paul Nesbit began working for the Allen Lund Company in February of 2020, when they acquired Des Moines Truck Brokers (DMTB) in Norwalk, IA. He has been working in transportation brokerage since graduating from Grand View University in 2012. He first started as an admin for TMC Transportation completing carrier setups and billing. Nesbit later obtained his CTB and was hired at DMTB. He has been an account manager in the Des Moines office for the last eight years.