The Grateful Dead was one of the most prolific touring acts of all time, tallying over 2,300 live shows before Jerry Garcia met his untimely end in 1995. Few people know that The Dead had only one chart-topping hit, 1987’s “Touch of Grey.” In that song, Garcia received writing credit for only one line: “Light a candle, curse the glare.” It’s a play on my favorite quote: “Don’t curse the darkness, light a candle.”
We can learn a lot from these two quotes and apply them to the current market. It’s easy to take to the keyboard and declare every major market movement a “black swan” or “bloodbath,” but I propose a different approach.
The market may very well be heading for a steep correction. We know trucking is cyclical; it’s bound to happen. I would argue that, even if we’re heading for a significant downturn, there are ways you can prepare your business to weather the storm. There’s a lot of money to be made by whipping the market into a frenzy and then cursing the fact that folks are behaving irrationally. I get it, drama sells in the media business, but DAT is in the freight intelligence business. We’re here to help you get through this. As Jerry said over and over, “It’s Alright,”
Here are three strategies that can help shippers, brokers and carriers alike navigate this changing market. Let’s light a few candles, so to speak.
Strategies for shippers
Shippers should use this time to do some major routing-guide maintenance and repairs. We’re seeing primary acceptance tick up and spot/contract mix is starting to normalize. Shippers have a great opportunity to position themselves in order to protect budget and service heading into the 4th of July holiday and, looking even further ahead, the fall retail peak.
Strategies for broker
For brokers, this is a time of short-term margin expansion. Brokers that were deft enough to win RFPs over the last few months will likely be covering freight lower than anticipated in the spot market. As the market eases back down, tracking and ensuring that increased gross profit per shipment is offsetting reduced revenue per shipment on spot loads will be critical. As a bonus tip, it’s probably a good time to start bidding forward freight (RFPs) lower than the current market to ensure you have a healthy supply of contract freight heading into the fall.
Strategies for carriers
There’s no way around it, the market is heading in a direction that will be difficult for carriers. I do think that the lack of Class-8 truck availability will be a blessing in disguise to keep the market from over-correcting. Our Principal Market Analyst Dean Croke is a better source of advice in this space but in general, carriers need to be focusing on their expenses as we head into the summer. With fuel prices still above $5 a gallon, it is imperative that carriers find ways to reduce empty miles and keep the wheels moving underneath loaded trailers. Brokers have been historically prolific in securing contract freight, so I suspect the DAT One network will remain flush with freight to help carriers stay loaded.
There are, of course, thousands of words that can be written on navigating freight uncertainty. In fact, It’s DAT’s mission to take the uncertainty out of freight. We combine the best data in the industry with unrivaled analytical expertise to offer our partners visibility into where the freight markets are headed.
We may be heading into a prolonged down-cycle for truckload freight, but you’re not helpless in crafting your own success. Freight people are a resilient bunch, up and down the entire supply chain. In another nod to The Dead, “We will get by… We will survive.” We could choose to sit around fetishizing a possible recession and lamenting our woes, or leverage our data, tools and experience to take advantage of whatever the market throws our way.