Is There a New Normal or Just Business As Usual?

Gail Rutkowski | NATIONAL SHIPPERS STRATEGIC TRANSPORTATION COUNCIL

We’ve heard it called all kinds of names; “The Perfect Storm,” the “New Normal,” “Predictable Surprises,” and the “Frankenstorm,” but what are we really dealing with now? Is this the capacity crunch to end all capacity crunches? Maybe, or maybe it is just a natural turn of events based on decisions and actions made in the past.

Now, we can’t control the weather and it seems to me that some of this started during the last hurricane season, devastating communities that are still rebuilding. Trucking plays an important part during these weather-related events, and they seem to be coming at us faster and more violent every year. These events highlight the fact that companies need to have a business disaster and recovery plan and conduct training sessions periodically as well.

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The driver shortage that has been predicted for years is now upon us as the average age of a truck driver approaches his/her mid-to-late 50s with no younger people climbing into those seats. The good news is the Trump Administration has called for an easing of regulations; however, tougher regulations on hours of service, ELDs, and driver health, while they may be justified, further constrain the driver pool. Carriers aren’t rushing to add capacity without some assurance that they can fill those seats. The ELD Mandate cut into the available pool of small- to mid-size carriers that comprise a broker’s stable of carriers.

With all of this happening on the carrier and broker side, what are the shippers doing? How are they dealing with this crisis? Decision makers at shipper companies often fail to prepare for changes in the transportation marketplace because taking action requires a decision to change the status quo.

As many of you know, a large number of shippers have become less and less engaged in the actual movement of their freight. They have turned over the tactical operations of their transportation function to various 3PLs with mixed success. This does provide opportunities for 3PLs to grow and improve their customer relationships if they understand the current market and have made steps to improve their carrier relationships as well.

There are those 3PLs who have accepted that challenge and have grown their business by simply making it a point to know their client’s business better than the client does. Even with a lack of strategic direction from the customer, a good 3PL digs in and learns everything they can from both their client and their client’s customers. Don’t expect your customer to know or share information that will help you get the job done. By maintaining close contact with your shipper and carrier customers, you multiply your chances for success.

During times of tight capacity, relationships become more important. Your carriers are struggling to maintain volumes and provide equipment that has them making choices every day about where to put their trucks. Make sure they are in your hands by treating your carrier customers as well as you treat your shippers.

Gail Rutkowski is Executive Director of the National Shippers Strategic Transportation Council (NASSTRAC). She may be reached at grutkowski@nasstrac.org.