The current freight recession — coupled with more widespread soft economic conditions — has led some shippers to reassess their transportation strategies. In a low-volume market characterized by volatility, it is not uncommon for companies that typically utilize intermodal transportation to start moving most of their freight over-the-road in order to take advantage of suppressed rates.
This approach may offer short-term gains, but it can also undermine existing relationships between shippers and intermodal carriers.
“If intermodal is your main mode of transportation, the long-term negative impact of switching to over-the-road could be felt for years to come as the market swings,” Matt Pavlicek, senior logistics manager for John Soules Foods, said. “Companies get too caught up in chasing the dollar and end up sacrificing the relationship.”
Pavlicek encouraged companies to remember that the market will eventually tighten. When it does, shippers that walked away from their intermodal carriers during their difficult times may find themselves out of luck.
While volatile markets are inherently difficult to navigate, they also provide an opportunity for enhanced relationship building between shippers and their transportation partners.
“During the COVID pandemic and the aftereffects it brought, I never raised my prices with my clients,” Talon Logistics Inc. CEO Emmanuel Carrillo said. “I wanted to demonstrate what a true partnership entails, as we were riding this pandemic together, as your logistics partner and not just a vendor.”
Like most relationships, successful business partnerships are powered by two things: communication and honesty. If both parties are committed to upholding those tenants, they will be able to tackle most challenges — regardless of market conditions.
“I expect an open line of communication from my logistics partners,” Pavlicek said. “I want to be able to build a relationship when everything is operating smoothly and poorly. It makes everyone comfortable enough to have uncomfortable conversations.”
Honesty and integrity are the cornerstones of creating that open line of communication, but choosing the right partners from the beginning is also important.
“Talon was and continues to be built on relationships. What many people fail to realize is that good relationships are based on the human level and not on a transactional basis,” Isaac Castaneda, Talon Logistics’ director of business strategy, said. “When choosing the right logistics partner, it’s crucial to understand the level of transparency in which they operate.”
Pavlicek also vets all potential partners to ensure they have strong operational and regional knowledge.
“Too many national carriers will take on accounts but then don’t know the nuisance of the area,” Pavlicek said. “They also won’t have the proper connections to help resolve issues when they arise.”
Carrillo said, “I ensure that my R&D team goes to the full extent to visit the port, meet with terminal managers, shipping lines and personally drive the lanes. I want to assure my clients that my team will be subject matter experts regarding every aspect of their business.”
Technology also plays a pivotal role in choosing the right partner. In fact, Pavlicek is hoping to see more proactive tech options enter the market soon.
“The majority of the technology we receive is on a reactive, post-delivery basis. We are unable to react in a manner to mitigate failures or extra charges,” Pavlicek said. “I would like to receive technology to help on a proactive basis.”
While the right technologies can bring significant value to customers, it is crucial that transportation partners do not fall into the trap of all solutions just for the sake of presenting a more high-tech offering.
“There are a lot of startup tech companies that do not add value,” Pavlicek said. “It is important to do your research and vet what technology will actually benefit their customers.”
Talon has done just that. The company offers a suite of solutions designed specifically to streamline the customer experience, without any unnecessary bells and whistles.
“We dedicate our resources to ensure we always deliver customized logistics to each individual customer,” Castaneda said. “Talon has vetted and invested in the right technology partners, like FreightWaves SONAR, Portpros and Samsara. These innovative partnerships allow us to offer a more robust and transparent solution.”