Partnerships: A Cure for the Spot Market Blues

Shippers continue to experience the spot market blues. According to DAT Solutions, the average spot rate for trucking was 2.15 per mile at the end of March. The natural disasters occurring in the last half of 2017 merged with the ELD Mandate and the continuing driver shortage to send spot markets through the roof.

You see, capacity isn’t coming back any time soon. Here at AM Transport, customers are top priority; that’s why we believe in cultivating great logistics partnerships!

How can partnering with a 3PL help shippers navigate a volatile spot market? Let’s take a look.

Right now, drivers are frustrated by the ELD Mandate because by eliminating paper logs, it forces compliance with HOS rules. We believe that the April 1 hard enforcement of the mandate is going to force shippers to change they way they do business.

 Transport Topics’ Eric Miller reports that at a recent MATS (Mid-America Trucking Show) in Louisville, KY, Federal Motor Carrier Safety Administration chief, Ray Martinez told drivers frustrated with the mandate that when they wait at loading docks inefficiency is created in the economy. That inefficiency is bound to drive freight rates up. Both Martinez and drivers agreed that while HOS rules affect drivers, there’s no equivalent mandate forcing shippers to conform to strict time windows.  

Furthermore, the driver shortage will continue squeezing capacity until the industry finds ways to mitigate the negative aspects of the driving life–lack of exercise, healthy food options, disrupted sleep cycles. In the same issue of Transport Topics, Miller reports that truck drivers, as a group, have a “50% higher rate of Type 2 Diabetes than the national average.” There’s a lot of work to be done before we begin to see an ease in the driver shortage. However, with many good people researching and working on this problem, we fully expect innovative solutions—check out ATRI’s (American Transportation Research Institute) Young Driver Assessment Tool for an example of industry innovation.

How can good partnerships with 3PLs mitigate these problems?

Did you know that most small carriers still receive their freight from direct interaction with shippers instead of load boards and brokerages? That’s what a recent survey developed by CarrierLists and Freightwaves indicates. Here’s what we know–good brokers have relationships not only with shippers but with carriers. Shippers looking for solutions could benefit from these relationships.

And what about contract rates? We understand a shipper’s reticence to lock in contract rates; after all, according to our friends at Freightwaves, those rates have increased up to 10%. However, brokers with their wide variety of carrier relationships, can often lock in affordable contract rates that even out a shipper’s freight spend.

In the coming months, savvy shippers will shift their strategy from last-minute bids on the spot market to long-term solutions. And the best way to do this is to cultivate relationships with freight partners you can trust.

At AM Transport, we have 30 years of experience partnering with shippers and carriers. With over 10,000 approved carriers, we are positioned to find the best solution for your freight. We understand the worry skyrocketing rates cause, not to mention, the impact they have on your bottom line. When you work with us, we get to know you and your business. We ask questions, analyze your supply chain, and create solutions. We know logistics and we want to take the worry out of transportation so you can get back to doing what you do best.