What is a soft freight market?
In a soft market, the demand for transportation capacity falls short of the supply of transportation capacity, resulting in carriers reducing their price to keep the trucks moving and prevent downtime. The freight market has seen robust volumes over the past few years. New providers took advantage and entered this hot market. Additionally, carriers focused on increasing their fleets. Unfortunately, the increased driver wages and equipment costs coupled with a soft freight market have made it difficult to compete. This year is expected to be a record year for trucking failures. Good news for shippers, this market allows shippers to gain back some of the past 2 years of increased supply chain costs.
With this shift in mind, our cold chain storage and transportation experts have compiled our top three tips for cold chain shippers to consider in the current freight market. The swings of the freight market pendulum prove that having the right shipping partners in your corner is vital.
Quick Tips to a Soft Freight Market
Don’t select a 3PL shipper on price alone
Opting for the cheapest freight brokerage provider may compromise quality and performance. As with any purchase, the value you receive corresponds to what you pay. The ideal freight brokerage partner embodies flexibility, transparency, and effective communication. They possess the technology stack for shipment tracking, API integration, data analysis, and performance evaluation. By solely prioritizing price in your selection process, you expose yourself to the potential consequences of subpar customer service and a lack of innovation in the long term. Within the cold chain storage and transportation industry, engaging with a third party logistics company that cuts corners to compensate for its low pricing could make the difference between your success or failure.
Select a cold storage and transportation partner that can scale with your business in any freight market
We understand the unpredictable nature of the freight market, especially when it comes to frozen and refrigerated shipping. Anticipating the unexpected is crucial. That’s why having a reliable freight brokerage partner eliminates the uncertainty of whether your freight is adequately covered and if they can scale with you in peak seasons.
While contracted carriers are suitable for consistent lanes, the refrigerated freight market experiences peak seasons and special projects that require coverage beyond your everyday needs. These peak shipping seasons encompass periods such as produce season and the holiday specials such as Easter and Q4 holidays. Additionally, depending on your product, seasonality significantly influences your shipping schedule. The ideal shipping partner will possess limitless scalability to cover all your shipments, regardless of the time of year or market conditions.
Do your research and hire a reliable freight brokerage provider
Exercise caution when entrusting your freight to a company solely based on their claim of being a freight broker, as you want to avoid becoming a victim of freight fraud. It is crucial to ask important questions before booking freight with a broker to ensure that your company can have peace of mind knowing that your freight is safe, adequately covered, and in capable hands. In a recent article from the Wall Street Journal, annually, $500 – $700 million of shippers’ and brokers’ payments are related to double brokering. Furthermore, an emerging topic, load phishing, should be top of mind when doing due diligence. Load phishing refers to a strategic con to steal freight through a process similar to wire transfer phishing. There is a lot to learn about freight fraud. Still, the best action shippers can take is to ask thorough questions, including whether they are members of the Transportation Intermediaries Association.
The freight market is unpredictable. Sacrificing quality, lack of scalability, and the safety of your products for the lowest cost provider is risky.
RLS customers are provided with the highest quality customer experience for all of their cold chain storage and transportation solutions. Enjoy round the clock access to our team of cold chain experts, operations that prioritize food safety to safeguard their brand, and a robust, data-driven customer platform that empowers you to make informed decisions when you choose RLS.
Discover more about the RLS Diamond experience today by contacting our Business Development team.