Unprecedented Market Conditions….AGAIN!!!!

If it feels like spot market rates are exploding and pricing metrics are wrong only moments after they’ve been tabulated, well, you’re right! Welcome to Summer in a Pandemic… trucking style!

In spite of the fact that I’ve been working in the brokerage world for north of two decades, it seems like every year we talk about “unprecedented market shifts,” and “uncharted waters” in transportation. Whether it’s new trucking regulations, catastrophic weather cycles, trade wars, or global pandemics, there are always greater forces shifting our playing field in spite of our best efforts. The best strategy is to listen to what the market is telling us and to have a strong logistics partner to help navigate turbulent waters.

In 2019, the FMCSA reported that there are 777,000 for-hire trucking companies in North America, with around 2 million tractors and over 2.5 million trailers. In addition, they reported almost 17,000 licensed freight brokers. While that may seem like plenty of people and equipment to get the job done, you have to factor-in LIFE…vacations, illness, celebrations, births, deaths, all of the beautiful little speed bumps that life throws at us.

Seasonal peaks and valleys can be predicted, but we’ve now learned that pandemics and stay at home orders will make those peaks and valleys even steeper and more precarious than we’re accustomed to seeing. The life-cycle for a spot rate may have shrunk from 30 days, to a week, to a day, to a few hours, to the length of a single phone call. While that may seem extreme, the market is in upheaval and the drivers have options, and all of those options are likely paying above-market rates because capacity is king. Indecision is your worst enemy. Know how critical a shipment is before going to the spot market, know your breaking point and know who your trusted partners are. Nobody wants a fire drill, and nobody wants a service failure. So how do we make it through? We stay organized, we rely on our partners and we trust our relationships. ….and we maintain 6-feet social distance!

Brian Jackson

- Director of Surface Transportation