21 Jan Logistics as a Service: Be Consistent
Predictability vs. Low rates
It’s a shippers’ market, right. And in logistics, we know what that means. When spot market rates are lower than contract rates, as they are now, shippers tend to make a beeline for those low rates. It’s understandable. Like everyone else, you try to save money where you can and too often that’s logistics.
Here at AMT, we understand the impulse. But we caution our customers against relying too heavily on low spot market rates because when you do that, you’re trading long-term predictability for short-term reduced rates.
Dangers of Chasing Low Rates
Here’s the deal, when the logistics environment is one of relative equilibrium a capacity shortage is always possible due to any sort of disruption. We’re talking about weather, holidays, Roadcheck week, seasonality (farming, produce), and economic surges or booms. And when this equilibrium is lost, if you’re shipping things, your logistics budget is immediately strained.
Benefits of Consistency
This is what happened to many shippers in the last quarter of 2018 and on into 2019. Here at AMT, we were able to help our customers through this period of tight capacity by proactively putting in pricing prior to the main squeeze. And it was the right move because we were able to secure capacity during a time when there were fewer and fewer trucks to be found. Shippers who followed our lead were able to navigate those months with moderate increases unlike the shippers who fought any increases at all and were hit hard when the capacity crunch hit its highest point.
We advise the manufacturers and distributors we work with to play the long game. It’s critical to build relationships, to be a shipper of choice, to employ the right technology (TMS, Data Source), and to be strategic in provider sourcing (a good mix of asset and non-asset). Because we can predict with all certainty that the market will shift again. It always does.
Logistics as a Service and Playing the Long Game
That’s why at AMT, our Logistics as a Service offering is designed to help you stay viable in an ever-shifting logistics environment. We provide proven technology, exceptional service, and a plan customized to your unique transportation needs.
If you’re tired of late or dropped loads, embarrassed by service failures, concerned about changing regulations, and exhausted by reacting to transportation issues, you should schedule a call with the experts at AMT today. We’ll study your supply chain, implement processes and technology, and build relationships with the right carriers to create predictability and consistency so you can spend your valuable time growing your business instead of putting out transportation fires.