22 May Driver Satisfaction: Cure the Spot Market Blues
Spot market rates got you down?
A few weeks ago, we suggested that the volatility of the freight market, the capacity crunch, the driver shortage, and the booming economy creates a perfect storm for shippers who need to get their freight moved and need it moved yesterday. In an era where customer satisfaction is king, shippers are looking for ways to ensure capacity and avoid rising spot market rates.
Here at AM Transport, we believe that smart shippers become enlightened shippers when they create good logistics partnerships with 3PLs whose wealth of experience, technological resources, and long-lines of communication translate into cost-efficiency and capacity for our customers.
Did someone mention driver satisfaction?
A recent article in Transport Topics by Thomas Black, explores a relatively new, but quickly becoming normal trend in the freight industry. Shippers are finding it not only smart, but actually necessary to court drivers.
Black writes, “Trucking companies’ increased leverage is applying pressure to cargo costs as accelerating economic growth bolsters transportation demand and exacerbates driver scarcity.” He cites Bloomberg Intelligence, reporting that spot rates in the first quarter were up 27% from the same time last year.
Ongoing driver shortage impacts freight costs!
According to the ATA, the United States freight industry is short about 50,000 drivers and that number is expected to rise to nearly 174,000 by 2026. This shortage is impacting freight costs! Trucking companies find themselves in a scenario where they are able to charge more, be choosier about they freight they are willing to haul, and more discriminating about who they haul for.
Trucking companies are looking for drivers and are employing a variety of incentives from sign on bonuses to higher wages. What’s interesting is that shippers are tuning into the be-good-to-the-driver game!
Black reports that giant food and beverage supplier Nestle is using drop-and-hook operations to speed the pickup process. They are also working hard to make driver waiting areas pleasant with restrooms, bottled water, coffee, and a television. Along with paying for driver detention, this helps Nestle stave off high spot rates. We think they’re on to something!
Be Good to the Driver!
That’s a motto we at AM Transport Services have believed in for 30 years. With over 10,000 approved carriers, we understand that relationships are important. That’s why we’ve cultivated strong partnerships with the best carriers and drivers the industry has to offer. Enlightened shippers know that relationships matter and partner with AM Transport Services.