Cut in Profit
by American Trucker (Carl.S)
(Out Here For You)
If shippers cut too far into carrier profitability, the chances for the market to shift based on the shaky ground that current providers like YRCW and Swift are on is setting the table for a disaster when the economy returns as there will not be enough capacity to handle the volume resulting in major declines in service and increases in pricing like the shipping community has never seen.
Just look at the LTL and Parcel strikes of 1994 and 1997 to see the impact when key players are removed from the market and freight demand is up. During 94 and 97 the economy was on the rebound and even robust, today we are faced with less carriers and a driver shortage, more environmental regs that limits this markets growth and frankly most people are not entering into the field of logistics as a truck driver.
I consult clients on taking an embraced approach or hiring an outside party to manage the relationships for them in case of just a shift. To encourage shippers to get the best price now could paint disaster in the future.
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