As 2008 winds down I think back to the hurdles we as transportation intermediaries, 3pls, freight brokers or whatever you want to call our industry experienced. I recall the first quarter when fuel prices were climbing as freight rates were irrationally going down, which led into the second quarter where we saw even more trucking companies to go bankrupt as fuel prices continued to climb, and then somewhere around the end of the second quarter or beginning of the third quarter freight rates shot back up as truck capacity tightened and fuel continued to hit new highs. And finally the fourth quarter saw fuel level off and actually drop; and freight rates drop as fast or faster than fuel as companies battled for business.
I have been in this business for 15 years and I can say this has been the most unpredictable, unstable year I have ever seen. Through those fifteen years I saw fuel surcharges come and go. I saw the new hours of service rules go into effect and everyone say that it would do away with milkruns because of stop off requirements and on duty hours, (stop charges went up because of it, but they have since dropped back down). I experienced the craziness caused by Hurricane Katrina as oodles of trucks went to that part of the U.S. to haul high paying FEMA loads. And every now and then I have heard trucking companies complain about the lack of qualified truck drivers and how we are one day going to have an extreme shortage because all of the older experienced professional drivers are going to retire. I could go on with many more examples of adversity and changes I have seen in this industry, but time limits me.
What will 2009 hold in store for us??? I have no clue. All I can say is that 2008 was a rollercoaster ride like never before and I hope 2009 has less corkscrews in it.
But don't worry, I'll have my safety harness on just in case.
Wednesday, December 10, 2008
Thursday, December 4, 2008
Recent bumper sticker
In my recent travels I saw a bumper sticker that made me smile. It stated, "I'm voting for the Old Man and the Hot Chick"-in reference to the recent presidential election. As the truck turned left in front of me I began to recall other bumper stickers that have humored me and the one that stands out in my mind relevant to the transportation industry is the large sticker on the rear door of some trailers that reads, "Say no to cheap freight." Each time I see this message I wonder where the truck is going and how much the load is paying to the truck.
The "Say no to cheap freight" approach sounds simple in theory, but we live and operate in a real world that is driven by capitalism. I only wish it were this simple. But alas the market determines the price and until we define what cheap freight is, we can't even attempt to adopt the "Say no to cheap freight" creed. What might be cheap to one company isn't cheap to another. One company might require higher rates on loads than another because they have a higher overhead. You could go on and on with the debate and it wouldn't amount to a hill of beans since it is all relative. In the free market supply and demand rule with iron fists and technology contributes even more to the fluid nature of rates by allowing information to be sent within seconds.
The "Say no to cheap freight" approach sounds simple in theory, but we live and operate in a real world that is driven by capitalism. I only wish it were this simple. But alas the market determines the price and until we define what cheap freight is, we can't even attempt to adopt the "Say no to cheap freight" creed. What might be cheap to one company isn't cheap to another. One company might require higher rates on loads than another because they have a higher overhead. You could go on and on with the debate and it wouldn't amount to a hill of beans since it is all relative. In the free market supply and demand rule with iron fists and technology contributes even more to the fluid nature of rates by allowing information to be sent within seconds.
Monday, December 1, 2008
Old files
As I was perusing through the bottom drawer of my file cabinet I stumbled across quite a few files of customers I called on in the past that are no longer in business and I couldn't help but wonder which companies might be next. It was officially announced today that the United States has been in a recession since December of 2007. I believe I speak for most everyone in the transportation industry when I say; "Who didn't know that?"
Our industry is the first to feel upswings and the first to feel downswings in the economy. I could have told some economist this news around January 2008 and it would have saved a lot of research money in the process. The difference between now and then is that the rest of the world is locking in on the recession mode as well with banking and financial troubles spreading like a pandemic.
And so it is with economic cycles.....we go up, we go down. We go up and then down. How low will it go? How long will the downturn last?-both million dollar questions. And another question that weighs heavily on transportation company minds is; will GM, Ford and Chrysler be able to weather the storm?
Our industry is the first to feel upswings and the first to feel downswings in the economy. I could have told some economist this news around January 2008 and it would have saved a lot of research money in the process. The difference between now and then is that the rest of the world is locking in on the recession mode as well with banking and financial troubles spreading like a pandemic.
And so it is with economic cycles.....we go up, we go down. We go up and then down. How low will it go? How long will the downturn last?-both million dollar questions. And another question that weighs heavily on transportation company minds is; will GM, Ford and Chrysler be able to weather the storm?
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