Is 2014 the year that carriers have been anticipating since deregulation? Industry analysts Thom Albrecht (BB&T Capital Markets) and Bryan Merolla (Cleveland Research Company) supported this view at the Trucking Owners Business Roundtable sponsored by Katz, Sapper & Miller, KSM Transport Advisors (KSMTA) and Scopelitis, Garvin, Light, Hanson & Feary held recently in Indianapolis. The only difference in their outlook was timing (now vs. later this year) and severity (2-3% vs. 5-8%).
An informal poll taken at our first annual KSMTA Freight Network Roundtable provided a unanimous answer to the question “Will there be a capacity crunch in 2014?” with all participants answering in the affirmative. Many shared anecdotal information regarding their recent experiences in meeting shipper capacity needs.
Participants also agreed that a strong freight network optimization strategy will be essential during a capacity crunch; as freight choices become available it is important that those opportunities be evaluated not only on their one-way margins but how those opportunities fit into the carrier’s freight network strategy. “Across the board” rate increases were also discussed with most carriers voicing a preference for lane specific increases; again ensuring that each piece of business fits the freight network strategy. Updated tools to assist carriers in these freight network and pricing strategies were also unveiled.
Conditions seem to be aligning for a capacity crunch; carriers need to invest and be ready with knowledge, processes and tools so that they may respond strategically rather than opportunistically when opportunities are presented.
About the Author
David Roush is president of KSM Transport Advisors, LLC, part of the Katz, Sapper & Miller Network. With 30-plus years of experience, David’s focus includes freight networks, financial management, operational metrics, and optimization strategies. Connect with him on LinkedIn.
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Capacity Crunch| Trucking Roundtable | Trucking Profitability