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Managing the Realities of Today's Freight Market
Landstar Agents and business capacity owners (BCOs) who are effectively managing their businesses in the current freight environment attribute their success to staying abreast of market dynamics and being flexible in their approaches to freight opportunities. Some realities of today’s freight market are:
- The availability of truck capacity, when compared to available truck freight, is much more balanced and readily available in 2019 than 2018.
- Many customers have made it a priority to obtain competitive rates given the more balanced supply of trucks when compared to shipment demand for their products.
- Load tender acceptance levels by contracted carriers is significantly higher in 2019 than 2018, where large volumes of loadings were rejected by these core carriers and available in the spot market at or near record rate levels in 2018.
- Customers (both direct and 3PL) more commonly distribute load opportunities to multiple carriers/providers simultaneously, in search of competitive pricing. These customers ultimately tender the load to the quickest and/or most cost-effective carriers.
Industry and business publications have recently reported on the market shift in trucking and freight transportation. An Aug. 29 Wall Street Journal story reported that approximately 640 carriers went out of business in the first half of 2019, stating “trucking company failures are rising as faltering freight demand exposes operators unprepared for a downturn after last year’s red-hot shipping market.” The story continues to attribute the closures to rising insurance costs and that “trucking companies that boosted driver pay and plowed last year’s profits into record orders for new equipment are wrestling with a tougher price environment and slackening demand.”
Landstar agents who have competitive pricing on opportunities and who make timely capacity commitments to customers are more likely to continue to see solid freight volumes. The keys to navigating the current environment are tied to selling value, understanding the competitive landscape and the working relationships between agents and BCOs. In response to the realities from above, agents and BCOs often cite the following:
- The speed of business has accelerated, requiring quicker decisions to seize opportunities.
- Use of Landstar business tools and apps can help make better decisions timelier and allow for a more efficient agent and BCO operation.
- Agent and BCO relationships matter and the time spent to develop them pays off.
Wishing you well as you strive to keep current with the market and make the right decisions on your road to success.