Shippers Encouraged to be Choice Customers for Carriers

Published online: Sep 03, 2021 Articles
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Source: The Packer

Trucks will continue tight for the foreseeable future, and shippers need to do all they can to make themselves preferred customers, Kevin Vandenberg says.

Vandenberg, account manager for CH Robinson, spoke on the refrigerated truck rate outlook Sept. 1 at the 93rd annual convention of the Idaho Grower Shippers Association.

Market forces that favor increased truck capacity, he said, include high pricing, driver signing bonuses and strong truck demand. Factors that decrease truckload capacity include slowed truck manufacturing because of part shortages and labor headwinds. 

Increasing demand for truck capacity is seen with the economic stimulus, retail spending, inventory replenishment, consumer sentiment, and housing. 

The federal stimulus package enticed some drivers and warehouse workers to make money by “sitting on their couch” as opposed to joining the workforce, he said.

With 62 percent of truckers in the owner/operator category now, Vandenberg predicted more and more entries into the freight business by that route,  since the barriers to entry are low.

Rate Outlook

With truck capacity continuing tight, Vandenberg said that CH Robinson’s projections point to 5% to 6% growth rates in spot rates from early September to the end of the year. Less than truck load rates remain elevated compared to the historical five-year average and the truck driver shortage is not easing, he said. 

“Labor is tough and it’s not just the driver community,” he said. 

Warehouses also are seeing labor shortages.

Since many younger drivers want to “be home for dinner every night,” Vandenberg said companies are trying to accommodate them as much as possible with shorter routes.

“Millennials don’t want to be on the road for two, three, four weeks at a time,” he said, so trucking companies are trying to get drivers in their trucks by making the job conditions more attractive for the long term.

Key drivers for 2022, he said, will be the strength of the economy, supply chain and labor restraints and inventory rebuild continuing for multiple industries.

Becoming a Shipper of Choice

Shippers should work to be a shipper of choice for carriers and drivers, Vandenberg said.

Reducing wait time for drivers should be one aim, and investing in good facilities is another, he said.

Having a more consistent experience at a shipper’s facility will make drivers want to come back, he said.

“Right now, we’re trying to do that as well, trying to make life easy for our (transportation) providers,” he said. “We need the supply to meet the growing demand that’s out there.”

Having accurate forecasts of need when setting up transportation contracts with carriers is critical, he said.

“Having more articulate conversations with your providers, and having a plan when things go off plan is obviously important,” Vandenberg said. 

Investing in technology to remove manual touch points can increase efficiency at a time when it is tough to remove costs from the system, he said.