To gain insight on the transportation marketplace in 2019, it would be useful to have a crystal ball. Unfortunately, we’ll have to go into the new year without this tool. Although we don’t have this tool, we will use experience and data from previous years to guide us. Let’s review potential opportunities and obstacles that will impact full truckload transportation sourcing and planning for the coming year.
Fleet vs. Driver
Transport Topics recently published a survey by the American Transportation Research Institute that highlights a gap between industry professionals. The survey reviewed the difference between the perspectives of truckload carriers and professional truck drivers.
Drivers identified some of their top concerns including parking, driver distraction and highway infrastructure funding. However, truckload carriers identified concerns such as driver shortage, driver retention and tort reform.
This priorities gap requires alignment in order for the needs of the stakeholders, including shippers, to be met in 2019.
Finding Spot Trucking Capacity
Most shippers purchase full truckload capacity based upon transactional needs as purchase orders arrive or products are sold. However, by developing value propositions with carriers and truckers, 3PLs have the ability to combine capacity and share access with shippers. These fundamental relationships between logistics providers and motor carriers will remain essential. Although innovative technology is improving the scale, it can’t replace the interpersonal communication necessary to create a positive experience for all.
Rate Budgeting
The pace of changing rates was evident in 2018. However, rates will likely find balance in 2019 as the supply and demand between contractual and spot markets move into stability.
Industry insiders, blogs and Wall Street analysts suggest that top-line growth will range from 4-8% over a 2017 baseline.
This is dependent upon lane and equipment type. However, demand increase or tightening of supplies will push spot and contract rates well above this range.
Mode Conversion
During the first quarter of 2019, shippers should receive improved access to capacity and competitive pricing. As a result, this will make testing conversions from over-the-road to intermodal much easier. Intermodal shippers should be prepared to quickly secure intermodal box/drayage capacity that will carry the business into the peak season.
As the year goes on, Class I railroad networks and supporting drayage providers will tighten. Consequently, waiting until the summer of 2019 to consider shifting over to intermodal will be too late.
Multi-Dimensional Logistics Providers
Although the number of 3PLs in the marketplace continues to grow, the field is being subdivided. This is a result of shippers working to align supply chain networks with 3PLs that have the right mix of services, technology and customer experience.
Too many shippers have experienced the poor quality of purchasing the “lowest price” during 2018. It’s key to balance economics with carrier strength and service performance in order to achieve the right mix in 2019.
The coming year brings a renewed promise of opportunities and challenges for shippers and transportation providers alike. Strengthening the relationships between the parties, improving communication and actively adjusting tactics and strategy are all important to meeting the demands of the quarters ahead. A crystal ball would be helpful in a static marketplace, but in this changing and shifting environment, it is better to be equipped with strong contacts who can help you create a successful logistics plan.
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The England Logistics Full Truckload division offers a range of services for companies of all sizes. Dedicated team members are available day and night to offer solutions and assistance with all logistical needs. Regardless of the transportation mode, our market and seasonal specialists provide flexible shipping solutions and are committed to help every step of the way.