During the 2015 FTR Transportation conference, which took place from September 13 – 15, 2015 the primary focus of intermodal shippers was on maximizing capacity and emphasized carrier relationships to promote efficiency. Specifically, discussions centered around whether or not capacity would be available to the shippers when needed, how best to secure that capacity, and, of course, what it would cost to secure it.
Speakers at the conference said that the “adequate” or “loose” capacity they’re currently experiencing is hanging in a delicate balance where even a tiny domestic or global change could thrust the industry back into the capacity shortage it experienced in 2014.
A JOC article quoted Derek Leathers, the President and COO of Werner Enterprises, warning conference attendees that the industry is in jeopardy of experiencing the pandemonium it endured during the 2014 winter storms. He cited Werner’s success in growing its fleet by 7,000 trucks that quickly became – and still are – fully booked as evidence that capacity is not as “loose” as some believe.
According to another JOC.com article, September saw freight volumes rise by 1.7 percent based on the Cass Index. Prior to this, volumes decreased 1.6 percent in July and another 1.2 percent in August. The industry also saw a 2.4 percent increase in shipper spending from August to September. Even though September’s increases are good news, the industry is not out of the woods as shipping volumes and shipper spending are down 1.5 and 6.6 percent, respectively, from last year. The increases are likely temporary improvements due to pre-holiday shipping as well as smaller inventory volumes accumulated since Fall 2014.
Load Delivered Logistics shared tips for how shippers can attract and secure capacity. These included:
- providing attractive rates,
- maximize driver amenities and productivity,
- fully understand networks,
- embrace technology, and
- offer appealing opportunities to carriers.
This blog is recommending that shippers increase efficiencies wherever possible and provide capabilities that will enhance shipper-carrier relationships.
For the time being, shippers are open to paying above normal costs if it will guarantee them long-term capacity.