Ways for shippers to take advantage of the current slack in logistics market

Shippers should stay ahead of market curves

Photo: iStock

Beginning in 2023, shippers are currently navigating a more favorable national freight market. As the previous year came to a close, the industry entered a deflationary period marked by a gradual loosening of capacity and falling spot rates. In Q4, retail sales, manufacturing output, and imports all declined, resulting in a decline in freight demand across the board and a weaker market in Q1. This softness is anticipated to continue through 2023, but the market will eventually tighten, making this the ideal time for shippers to prepare for the next market cycle. According to Steve Moore, head of TM operations south for Uber Freight, if the market shifts sooner rather than later, unprepared shippers may have a bad year. Therefore, shippers must anticipate market fluctuations, as industry volatility has become the norm.

Here are three strategies that shippers should immediately implement to maximize lower rates and best prepare for the market recovery:

Strategically manage your volume in the spot market

Shippers should migrate a sufficient amount of volume to the spot market and capitalize on it while supply and demand are in a state of positive equilibrium, as this is the optimal environment for shippers to explore new strategies. As spot rates are currently lower than contract rates for low-volume or even a small portion of high-volume static lanes, shippers could investigate the spot market to reduce costs.

Expand and strengthen your network of shippers and carriers

Shippers should use this time to develop and diversify their portfolio by evaluating new prospects in addition to their current carrier base. Thus, shippers can continue to diversify their shipping options and build an optimal portfolio of partners. In addition, collaborating with other shippers can be an excellent way to increase network efficiency. With a tech-first strategy, shippers can enhance their network and optimize shipments, maximize capacity, and lower transportation costs.

Enhance your supply chain technology to increase flexibility

Shippers should implement key operational and technological changes now, rather than when the market is more competitive. Providers can use this time to update out-of-date TMS or conduct supply chain health assessments. With a robust TMS in place, providers can employ AI and machine learning to generate predictive analytics for enhanced supply chain tracking and visibility. In addition, these systems can implement dock scheduling capabilities to boost warehouse productivity. Using managed transportation services can also provide shippers with customized solutions and superior decision-making skills for larger-scale planning. Shippers should also consider eco-friendly options like EV deployment. Partners in transportation management such as Uber Freight can assist shippers in navigating the complexities of electric freight transportation.

In today's soft market, shippers can rely on technology to quickly source carriers in their marketplace network as opposed to time-consuming methods such as RFPs. It will be crucial for shippers to develop this type of adaptability in order to navigate potential market disruptions in the future. With these capabilities, providers can enable long-term solutions as efficiently and effectively as possible, regardless of market conditions.

Looking ahead: Navigating the future of logistics

When the market eventually tightens, these strategies will allow shippers to operate more efficiently. Shippers can optimize these and other strategies with the assistance of managed transportation partners like Uber Freight. With more than $17 billion in freight under management (FUM), Uber Freight enables shippers to implement strategic cost and capacity improvements. Working with the right transportation partner can streamline the process of keeping pace with the market.

Steve Moore, Director of TM Operations for the South at Uber Freight, stated: "Our end-to-end solutions, extensive customer portfolio, and extensive shipper-carrier network enhance shipper agility, efficiency, and stability in the face of market volatility, which propels businesses forward. Similar to an exclusive membership. When you are an Uber Freight customer, you have access to a market opportunity that cannot be found anywhere else."

MintN