A freight recession is on everyone’s mind as capacity continues to loosen and spot rates remain on long steady decline for months.. As rates begin to approach pre-pandemic levels, some carriers are shifting their focus toward protecting their bottom lines.
The logistics industry is collaborative by nature and leaning into that fact is one of the most effective ways carriers can ward against turmoil during market shifts.
“The most important thing for carriers to focus on, regardless of how the general freight market looks, is establishing and maintaining strong relationships with their direct shipper and broker partners,” Stephen Drew, Emerge Senior Director of Customer Operations, said. “The more emphasis and focus a carrier puts towards servicing the freight they have been awarded at a high level, the more opportunities they will be presented with over time and the less likely it will be that their existing freight is pulled from them.”
Relationships require both give and take. Carriers that continue to honor contracted rates during market spikes are more likely to continue to thrive during downturns, as shippers may be apt to return the favor. Carriers that played fair over the past two years, despite strained capacity and soaring rates, will likely be rewarded now.
Carriers hoping to control their costs and boost their revenue ahead of a potential recession should hone in on those relationships and maintain consistent contractual business with the highest level of service possible.
“If a large percentage of a carrier’s fleet is focused on spot business, their success and profitability will ebb and flow with the current freight market,” Drew said. “In the instance a carrier does not have a large book of contractual business, it is important to utilize technology, which will allow them to source new opportunities efficiently.”
Emerge offers a variety of tools for carriers, including those looking to shift their freight mix and acquire more contracts.
The company’s contract marketplace allows carriers direct access to bid directly on shipper’s. According to Drew, RFPs run through Emerge by a variety of types of shippers — ranging from small shippers to Fortune 500-level shippers — on a daily basis. Thanks to the flexibility Emerge offers shippers, these contracts span a wide range of time frames and operational specifications.
“The variety of freight and shippers procuring their freight through Emerge allows carriers to find opportunities which fit their network seamlessly and gives them the ability to lock in contractual business and consistent revenue,” Drew said. “In addition, Emerge’s marketplace allows carriers to efficiently access spot opportunities at the click of a button, which prevents wasted man-hours searching for ways to fill their fleet’s empty miles.”