Weather-related delays and low inventories, along with the steadily improving economy, are increasing demand for carriers. Sounds good? It is if carriers can keep up with the increasing demand. Carriers are sometimes unable to keep up with the increased demand. The harsh environment surrounding logistics can choke carriers, some to the point of closing. This greatly contributes to capacity crunch.
When it comes to securing capacity and agreeing on a price, it may seem as if carriers are in the driver’s seat. This is understandable, as the rarity of finding a good carrier is giving them the upper hand in the negotiation. However, as a businessman yourself, you must make deals on level ground. Here are a few tips to stand on the same ground as your carriers:
- get link Know the rates– Sure, tighter capacity may cause rates to rise, but you need to know what rates are prevalent today in order to negotiate with confidence. Knowledge is power, and the information regarding their competitors is a good bargaining chip when dealing with your carriers.
- Know where capacity is tight – Though unethical, some carriers will insist on a higher price even when their area isn’t affected by the capacity crunch. Again, information is the key. The more information you have, the lower the price you will pay. It will also guide you in selecting loads that will be delivered to areas unaffected by the capacity crunch, bringing in more profit.
- Find new partners in the lanes you run – You can use your TMS to search for other carriers that operate in the same route that you need. If a carrier that you used to work with tries to overprice you, it may be time to break up the relationship and start one with another carrier.
- Offer a higher paying backhaul– Brokers can earn the loyalty of small, for-hire fleets by helping them design profitable round-trip routes, even when your freight takes them only one way. You can use your TMS to calculate the reverse move or backhaul, and display the best options for the trucker to secure a pair of return loads, to create a more profitable, triangular route back to the point of origin.
- go to link Be where truckers are– When you post a load, make sure you’re reaching drivers where they are. Select the load board that has the highest number of registered carriers for your lane and offer your prices there.