By Jack Porter, TPP Managing Director & “The Trucking Activist”
Over the past two weeks I have seen the plans and the strategies that the “best in class” carriers are putting in place for their business during recovery. The key takeaways for me were plenty, but it starts with the phenomenal job these fleets have already done. Their main mission of keeping their workforce healthy, and the supply chain secure, should be a roadmap for all businesses when re-opening. It starts with strong leadership, open communication, and a “do it now” philosophy when deploying critical resources.
I applaud the TCA for their platforms which keep their members informed by sharing best practices from current members to share the knowledge base. I can faithfully say that this group of carriers are not only best in class, they are #allinthistogether. Their results have been remarkable, witnessed by the fact that our shelves remain filled, our Drivers taking care of themselves and most of their support folks are working from home. Their current priorities will remain the health and safety of their workforce, especially considering all other businesses starting to reopen. They will utilize temperature testing, face masks, social distancing, and perhaps a clear strategy for one portion of their workforce to remain at home.
The next concern and business challenge will be their revenue stream going forward. In a nutshell, all modes have been hit with decreasing rates, however, some have seen the compounding effect of reduced loads from their core shipper partners. The overall result to the carrier is reduced revenue from load count and from rate. Quite honestly, the reduced revenue hits when the carrier costs have done nothing but gone up; keeping drivers and support people on payroll, increased deadhead to attain freight, all the safety costs incurred for driver security to mention just a few.
This is a supply and demand business, but we also know that there is a subset of a marketplace and that is a strategic relationship with your business partner, or is it strictly tactical and transactional relationship the blows in the wind of current market conditions? Both exist in the market today, and carriers will need to develop critical capacity strategies that will enhance and support their strategic partners, while the end result will leave the tactical transactional partners to seek other truck capacity supply. We know the capacity crunch will come; we just do not know when. These carriers are setting their strategies now, so that they can support their shipper strategic partners.
All of these carriers are looking at enhancing and putting technology to work. There is an abundance of technology in this space today, and it can sometimes be hard to figure out the winners and losers, especially against a backdrop of reduced Capex. However, with telework policies being considered for the ongoing future, digital will continue to play a large part. Along with supporting the at-home worker, there is a positive move afoot to help the driver and dock worker with digital bill of lading and proof of delivery. As COVID-19 practices have taught us, there’s residual benefits to reduced paperwork, clearer information, and no-touch interaction for the health and wellbeing of others.
Keep up the good work folks. Stay safe and come back to the office carefully and thoughtfully by applying lessons learned.
