It is no secret to transportation professionals that truck carriers are in high demand, are busier, and more profitable than they’ve been in years. The marketplace is changing rapidly, and we are only in the very early stages of a significant shift. We’ve been here before. And while there is no need to panic, the need to talk to your organization and begin planning and establishing reasonable expectations is urgently needed, now.
After a recent meeting with one of our customers, their sales manager was so interested in how his company can adapt to the shortage of transportation equipment and capacity, that he asked for our help and support, but also asked us to co-author a letter to his organization from him. Many other customers have asked us, “so, how is this [equipment shortage] going to impact us?”
The biggest challenge for any of us when we learn something new is usually, “how do I effectively get this information back to my organization?” We loved the letter idea, and created this version for you. Download a Microsoft Word version of this letter here:
We have an important situation that needs everyone’s attention to effectively manage. The trucking industry (and ocean and air) is in a state of transition, with extreme shortages of equipment. This impacts all businesses and deliveries to customers. The good news is that we can manage this, through our service provider Tucker Company Worldwide if we try.
One of our long-time truckload providers, Tucker Company Worldwide has been working with us to successfully manage through this to ensure timely deliveries and service continuity for our customers.
We have been meeting with Tucker to discuss ways to contain costs, improve planning and maintain pickup and delivery times, through the developing crisis. This isn’t a transportation issue, and Transportation and Tucker can’t solve this alone. They need help from our whole company. This ties into our efforts at forecasting, and some improved communication. The bottom line is the more accurate information we have the better we can serve our customers.
Basically the strongest steps that we can take are:
(a) To be knowledgeable of what is happening for our planning purposes. Transportation and Tucker will help us here.
(b) Be very efficient in our planning—including production and customer orders.
i. Even a tentative “head’s up” on potential orders to Tucker, can allow them to tentatively book a truck before the good ones are gone.
ii. Don’t forget about inbound. Raw materials are shipped into us by the same trucks that are experiencing this issue. Keep this in mind.
(c) Inform our customers of this industry change, and help to shape their expectations.
i. It is always better to be prepared and knowledgeable.
ii. This may actually help our customers better understand what they are probably seeing themselves.
iii. Work with customers to build some flexibility on pickups or delivery times. In this market, a day’s worth of flexibility can save hundreds of dollars in freight.
iv. Tucker and/or Transportation are perfectly able to help folks better understand any details or nuances, and prepare us for a talk with a customer.
Tucker Contact Info:
__________, Account Representative, 856-317-9600, x___
Gene Wherrity, VP Ops, 856-317-9600, x125
The two (2) big issues that Tucker informed us about are a once in a generation problem, combining economic and regulatory forces.
Economic Factors: The deep recession forced a lot of truckers out of business. As the economy improves, the supply of truckers simply isn’t there, and demand for the trucks that are there, is very high. This is causing bidding wars in many areas, creating higher prices throughout the industry, while once “normal” service levels are threatened.
Governmental Regulations: At the same time, the federal government has introduced much tighter safety and health regulations that are forcing more drivers and trucks off the road. Two more significant regulations will likely hit this Fall, that are expected to worsen the shortage.
Please give this some thought and consideration. The better job we do at forecasting, providing advance notice, and requesting some pickup and delivery flexibility, the better our chances to control costs and keep customers happy.