The global economy and the logistics sector are inextricably linked. Global businesses continue to rely heavily on transportation and third-party logistics (3PL) services to move goods and commodities across the continent. This implies that the economy’s ups and downs might significantly impact all sorts of businesses, including individual truckers and a more extensive fleet of trucking companies. Factors ranging from international trade disputes and economic upswings or downturns to pandemics and even natural calamities can impact the quantity and profitability of freight shipments.
However, your business doesn’t have to fail in the face of severe downturns. So, how can we protect ourselves from a recession? In this post, we will examine a few best practices. But first, we need to understand what a recession is like in the Protect Your Profits in a Freight Recession freight industry. Keep reading…
What is Recession in the Freight Industry?
A recession in freight industry is a type of recession that impacts the movement of goods instead of the overall economy. Where a vast economic recession affects multiple industries, a freight recession targets the logistics sector, causing a decline in demand for freight forwarding services. This may occur as a result of:
- Oversupply of Capacity: When there are too many trucks, ships, or airplanes compared to the number of goods, it causes the rate of the freight to drop
- Decrease Demand: When a business’s production is less due to external factors, it reduces the need to move products.
- External Factors: Trade among countries may be restricted or decreased due to new tariffs, political tensions, or global events.
5 Ways a 3PL Service Provider Can Help You During a Freight Recession
By working with an industry-leading third party logistics provider, you can manage all the uncertainties in the shipping industry, including the present freight recession. A top 3PL service-providing company should be able to provide you with the following solutions to support your long-term carrier partnerships, help you maintain profitability, and get the highest-paying loads.
Financial Stability
Unfortunately, the freight recession is making it harder for many truck drivers and carriers to stay profitable. Ask your 3PL partner about their financial stability and whether they have invested in shipping options other than ordinary freight, such as parcel service, international shipping, and multimodal freight, which helps them stay afloat in uncertain times. Ultimately, the last thing you want is to work with a carrier or 3PL that struggles when the economy is down.
Technology Investments
Shippers like you must preserve transportation stability, optimize operations, and develop long-term shipping strategies with 3PL services that will benefit you long after the recession ends. Technology-based solutions play a significant role in this work.
The Transportation Management System (TMS) lets you track shipments with real-time shipment tracking, locate trucks, compare prices, add insurance, and manage invoicing. This platform and tech support should be available from the top 3PL to help you.
Strategic Shipping Guidance
A good 3PL should have a long track record of success in the shipping industry to help you streamline every part of your shipping operations. That should include – making suggestions for enhancements at every stage of your supply chain, including technology, procurement, goods transportation, and other solutions.
Industry and Carrier Relationships
When truck drivers find it hard to find loads and shipments, working with a 3PL with a strong carrier network on hand is crucial. Specifically, a 3PL should provide access to a pre-screened network of expedited freight carriers who can transport your goods quickly. They must have close ties to these shippers and be able to offer you discounted pre-negotiated rates.
Industry Analysis
Staying informed and interpreting the most recent freight recession news is challenging. Experts have updated on the most recent statistics, information, and results from the shipping sector should work for a premier third-party logistics company. They should then impart this knowledge to you and your logistics company and explain its implications.
Conclusion
US Ravens have many years of experience in the logistics industry that helps thousands of shippers and truck drivers move products efficiently. Visit our website to see how we can assist you in transforming your freight shipping.