According to DAT Trendlines, 2015 freight availability and rates were off through February versus a year-ago, with YTD spot load-to-truck ratios for all truck types off over 50%, and spot rates down -3.2% for flatbed, -3.7% for reefer, and -5.1% for van. Consistent with seasonal trends, freight availability and rates began strengthening in the first week of March, with load-to-truck ratios up versus a year ago for all truck types (flatbed +12%, reefer +15%, van +16%). Spot rates were off slightly for flatbed -0.5%, and up for reefer +2.4%, and van +3.2%.
Capacity and pricing may continue to be under pressure for the balance of the year, as suggested by data detailed in the CCJ 2015 Economic Outlook survey. According to this study, the top 4 concerns for carriers heading into 2015 based on 411 respondents were:
- Driver Availability:
- Nearly half of all survey respondents chose driver availability as their biggest challenge heading into 2015
- A minimum insurance increase
- Electronic logging device mandate
- Speed limiters for heavy-duty vehicles
- Drug and alcohol clearinghouse
- Maintenance Costs:
- Aging equipment
- Equipment and expertise for complex and technology-laden truck models
- Technician shortage
- Freight Pricing:
- There are more loads than trucks, resulting in tight capacity and great demand. The concern for carriers is whether freight rates will increase enough to help offset driver wage growths and other organization costs.
As a shipper, what can you do to be a step ahead?
- Have clear and proactive communication about needs, forecasts, and concerns.
- You can’t fix what you don’t measure and you can’t improve on what you don’t track and report. Scorecard your carriers and brokers on more than just on-time pick and delivery percentages.
- Fully understand the way your operation works, especially from the eyes of the brokers and carriers and create an internal scorecard to hold yourself accountable to keeping up your end of the bargain.
- Being a “desirable shipper/receiver” will go a long way to attracting capacity. Remember, brokers and carriers talk too…
- Develop partnerships with vendors and customers to try and create a forecast and plan for orders (if possible).
- If you can have a reliable shipping pattern, or schedule, a carrier or broker can more easily dedicate the necessary capacity.
- Work with a broker who can help optimize which modes and carriers you use on each shipment.
- Being open to using multiple modes will help improve flexibility in your network, which comes in handy during unforeseen circumstances.
- Treat transportation as the beginning or the delivery of your sales process, rather than just a means to an end or a pure expense.
- The vendor’s or customer’s experience in transportation will go a long way in improving and upholding company branding.