Collaboration. Shipper of Choice. These are just a couple buzzwords transportation professionals need to get used to as they look to overcome the worsening capacity crunch.
The issue was top of mind at this week’s FTR Transportation Conference as trucking providers, shippers and others discussed the landscape of the freight industry.
As reported by Heavy Duty Trucking, a panel of industry execs warned shippers who “don’t behave well,” (by wasting drivers’ time to load or unload) while also being “transactional,” (fixated on hammering down rates) that they’ll be the most hurt by the driver shortage:
This capacity situation has led to what FTR’s Noel Perry called “one of the hallmarks of this era — increased discrimination among carriers.”
“What we’re seeing from a customer standpoint is we’re up with our core customers, our primary customers, but the secondary shippers want more capacity and we haven’t been able to deliver on that front,” added Craig Brown of Maverick Transportation.
Donald Broughton, an analyst and managing director at Avondale Partners, noted that “the thing we’re seeing widely happening is the discernment of ‘I’m not going into that shipper because it will take too long to get loaded, or I’m not going into that receiver because it will take too long to get unloaded.”
Scott Arves, president and CEO of Transport America, pointed out that younger freight planners and purchasers may never have experienced a cycle like this, since the last pronounced driver shortage was nearly a decade ago.
“… A final sign the apocalypse might be close – the ‘transactional’ customers are breaking out the P word, partnership. Frankly it’s been a long time since we sat down with a lot of transactional customers and talked about partnerships.”
Brown says more shippers are suddenly interested in talking about ways to eliminate driver irritants and waste, such as reducing bottlenecks at shippers’ facilities. “We’ve done a lot of collaborative work with shippers.”
With the advent of e-logs, detention surcharges are becoming somewhat easier to justify, but the panelists point out that charging a fee for wasted time still isn’t enough to make carriers whole. “By the time you look at the truck and trailer, forget the driver, you’ve got $150,000 worth of capital sitting out there and you’re going to get paid $60 (an hour) for three hours (waiting). You can’t run a Weedeater for that,” quips Broughton.
Brown noted the administrative headaches to collecting detention. “I don’t want to get paid detention,” he said. “I want to eliminate detention.”
Experienced and forward-thinking shippers feel the shifting plates beneath the freight market and are adapting to the new realities, says Jim Tucker, president and co-owner of freight transportation brokerage Tucker Company Worldwide. However, he adds there are still plenty who are getting “a rude awakening the next time they put out an RFP for bids.”
“There are a great deal of our customers … that have no idea what’s going on. A lot of them think they’re going to put an RFP out next year and they’re going to get better prices.”
“They’re going to be very surprised.”