Truckload Pricing and Market Fluctuation
Once again, supply and demand have impacted truckload rates. Simply put, there are not enough drivers on the road to move US goods to designated destinations. The carrier shortage has been fueled by COVID, and new drug and alcohol testing protocols, leading to a capacity crunch. Capacity is the tightest it has been since 2018. Truckload pricing continues to grow, and some analysts believe shippers will experience rate hikes as high as fifteen percent in 2021. In order to attract more drivers, increased wages will be needed which will fuel higher truckload pricing.
There can be major ramifications to a shipper’s transportation budget, such as overruns, when freight costs rise. So how can a shipper better navigate market ups and downs to avoid budget overruns? Unfortunately, the current way of sourcing capacity is static and was not built to effectively manage market fluctuation. The typical tender process uses a systematic waterfall process. When contracted carriers pass on freight, all subsequent choices become more expensive than planned. Without direct access to capacity, shippers will remain at the mercy of margin-hungry middleman brokers.
A disruptive SaaS solution has eliminated the middleman, has opened up direct capacity and has provided 100% pricing transparency. The software is called Optimal Transportation Spend (OTS). OTS empowers Shippers to adjust truckload price dynamically, generating immediate truckload savings and keeping cost control throughout the process. OTS software users also obtain 100% pricing transparency for a single source of truth for truckload cost. To learn more, you can join our upcoming webinar, "Mitigate Capacity Crunch While Generating Savings", as a panel of experts discuss how technology is helping shippers manage market fluctuation and control truckload cost.
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