This commentary appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.
Last year, we saw a record number of LTL shippers using our sourcing tools to shop around in the market, looking for optimal contract pricing to fit their needs. These customers were active buyers of freight transportation because they saw an easing of the tight capacity that had defined 2018 amid continued signs of a brightening economy. This sense of optimism, and the ability to be selective about providers in the market, may be coming to an end.
Shippers may be singing a different tune in 2020: Be prepared. Shippers should be ready for anything and make sure their carrier relationships are on solid ground, simply because it is extremely hard to predict the market in the coming year. Trade tensions will likely continue to dominate international relations, which will no doubt have an impact on domestic transportation. The presidential election is also a wildcard.
So how do shippers prepare for the unknown? Working to become a shipper of choice is extremely important. Anything shippers can do to make carriers more efficient will help establish a lasting, worthwhile partnership. Shippers should know which carrier prioritizes what freight type in which lanes and also know that the expectations they set during the bidding process have to match the reality after the new routings are implemented. When carriers have insufficient data, there is no way for them to accurately respond to a bid. This means they simply plan for the worst.
In the coming year, shippers should use the technological tools available to them — both transactional APIs and analytical bidding tools — to consistently evaluate their sourcing options and focus on becoming a true shipper of choice, translating a solid business relationship with a handful of trusted carriers into lasting business success.