Logistics experts, who had their fingers on the market pulse during COVID, have tales of profound changes to share by now. Almost two years back, the pandemic turned many industries upside down including freight. It was already grappling with capacity shortages, increasing rates, and intermittent capacity issues. And then, the global pandemic hit hard and shippers and carriers – they went scrambling for solutions.
That’s why, supply chain professionals in a post-pandemic world are okay to defy practices. Let’s discuss new twists, risky turns, and fresh potential
The dawn of an ‘inverted’ market
Shippers depend on “core carriers” regarding the handling of their contractual freight shipments – this had been the common practice for years. But today’s logistics managers are vouching for new modes and employing new carriers after COVID took away the contractual capacity from their early service providers.
Now truckload carriers are eyeing to augment their services to catch a larger share of the market by offering end-to-end coverage. On the business front, it could mean that they are looking to revisit their pricing models. Experts opine that shippers should better prepare themselves to procure services at unexpected rates for some time.
A new partner ecosystem
Global logistics is swinging to a very offbeat rhythm and tempo today, but that’s not the main problem. The real worry is it’s only getting faster. Shipping now requires weaving all parties together and becoming increasingly data-hungry to combat any change.
Each of them needs to benefit from a single source of truth in a central platform that will give them pre-emptive abilities. The collated data across various touchpoints can be sifted through and analyzed further to yield actionable insights. This historical data can help predicting the best rates on the best trade lens. The unique collaboration will likely save them from walking the tightrope between meeting the delivery demands and delivering on time.
New shift means newer opportunities
Disruptors like Amazon, eBay continue to set new expectations for customers in both the B2B and B2C landscapes. On the shipper’s side, this is creating additional pressures. As discussed above, the cost-effective and most efficient way to ride out the storm is adopting advanced tech tools.
The real catch is how shippers and carriers stand to enjoy a unique combination of services and more choices. Using digital freight platforms orchestrates the truckload market by matching up load requests with the available fleet. The co-existence of demand and supply allows shippers to flex while choosing a transporter or carrier according to their logistics requirements. Likewise, now carriers can afford to choose or reject an incoming freight. From an integrity and economic standpoint, the innovative model will let them deal with who treats them right and pays on time.
New sign in the freight equation
Even a few years back, most businesses used to procure a fixed amount of freight services through annual bidding processes. And as the freight needs would rise or decline, they modified the contract accordingly. Recently, it is pointless as companies struggle to win capacity at the best prices.
Eventually, shippers and carriers have started to accept all freight can’t be the same, and hence each should be managed differently. Picture this: a business is well-aware of its dependence on the transporter for different lanes. A lane that hauls once a week might not require the same fleet that operates in a lane that has 20- 30 loads per day. So, considerations might change from “already-working” to “might work.”
One can view the freight continuum as an extremely dynamic equation. While its one end has the carriers, transporters with the shippers controlling the utilization and owning the use of the assets. On the other end exists the spot market, and somewhere in between lies collapsed the contract market.
It’s clear that shippers can no longer continue to reckon one “silver bullet” solution that offsets all their transportation hiccups. And as automation of freight operations continue to happen, everyone can only expect cutting-edge technologies like artificial intelligence, machine learning, etc. to play bigger roles in this new wave of transformation.