Subscribe to our free, weekly email newsletter!

Always be prepared

By Jeff Berman, Group News Editor
June 07, 2010

Much has been made lately about higher freight transportation rates for shippers these days.

Given the economic environment during that time, coupled with lack of consistent demand, tight credit and cash flow, and wildly fluctuating energy costs, there were—and continue to be—myriad challenges for shippers when managing supply chains during these still-challenging times.

Going back 12-to-18 months or more, when it was clearly a shippers’ market when it comes to pricing, the shoe is clearly on the other foot.

In fact, this quote from a story LM reported a little more than a year ago, pretty much sums it up. The quote is from Stifel Nicolaus analyst John Larkin:

“Shippers need to be forewarned that if [they] are beating up carriers on price, they can expect the favor to be returned once supply and demand tightens up.”.

Well, Larkin nailed that one. In June 2010, rates are up and capacity is tight. And it looks like this is a situation that may not be changing anytime all too soon, given the pace of the recovery and the underlying theme of uncertainty which clearly still lingers.

Are increasing rates forcing shippers to re-think supply chain operations to any meaningful extent? If not, perhaps they should as it looks like higher rates are here to stay—for a while anyhow.

In fact, a recent whitepaper from our friends at TranzAct Technologies does a terrific job at analyzing factors that clearly have the potential to keep shippers up at night, regarding drivers for higher rates.

Without giving away the farm, here are a few items that TranzAct cites for continued rate pressure for shippers, with transportation costs potentially rising 10-to-20 percent within two years:

  • sharp fluctuations in energy costs;
  • tightening capacity as shipper demand outstrips carrier supply; and
  • federal legislation or new rules from the Department of Transportation that increase the cost of doing business for carriers.

This is only the tip of the ice berg in terms of the valuable information in this whitepaper. To learn more, go to

In any event, staying on top of things is paramount. Not doing that can hinder operations, harm business credibility, and do other harm. During these challenging time, shippers and carriers need to stay on top of their games to be better prepared for rate pressure, energy price spikes and anything else that comes along. Always be prepared for the unexpected.

Have a great week-JB


About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The United States Environmental Protection Agency (EPA) has awarded the Port of Oakland $277,885 to upgrade cargo-handling equipment and reduce exhaust emissions on the waterfront.

Entitled the Positive Train Control Enforcement and Implementation Act of 2015, the bill would extend the 2015 PTC implementation deadline to the end of 2018.

Carloads were down 5.4 percent annually to 285,856, and intermodal was up 2.1 percent to 280,844.

Did you know that there is a correlation between logistics solutions and customer loyalty? 70% of customers are willing to spend more money for good customer service which means you must have on-time delivery, proficient inventory management and a strong logistics strategy.

While coffee is one of the first things on the minds of many people early in the morning, it was especially prevalent this week, when Starbucks Chairman and CEO Howard Schultz gave the keynote address at this week’s Council of Supply Chain Management Professionals (CSCMP) Annual Conference in San Diego.

Article Topics

Blogs · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA