Why a Down Freight Cycle Is Ideal for Tech Investment
[Find the latest in trucking technology: Explore this quarter's issue of iTECH]
Trucking and logistics companies have seen market conditions weaken during the past year as spot freight demand has cooled, truck capacity has loosened and the macroeconomic outlook has been clouded with uncertainty.
Despite those headwinds, this market downturn can be an opportune time for transportation companies to lay the foundation for future success.
Businesses now have a chance to reassess their operations and invest in people and technologies that better prepare them for the next up cycle, industry executives said during a panel discussion at the Transportation Intermediaries Association’s 2023 Capital Ideas Conference, held April 19-22 in Orlando, Fla.
The most successful, fastest-growing companies are typically the ones that “use these down ramps to really set the table for what the future is going to look like,” said Rush Feldhacker, vice president of development at Neon Logistics. “They invest in tech, they invest in sales and they get ready, because they know the market will turn, whether that’s 12 or 24 months from now.”
Clevenger
Freight brokers have a tendency to overhire and undertrain employees while trying to keep up with market fluctuations, hurting their efficiency in the long run, but a down market is an ideal time to break that cycle, said Ryan Schreiber, chief growth officer at Metafora, a consulting firm for transportation and logistics businesses.
He recommended that brokers seize the opportunity to invest in strategic planning to help smooth out those market cycles in the future.
“Do a post-mortem on what the last up cycle looked like,” Schreiber said. “Where were you really, really struggling?”
Q2 iTECH
►Logistics Providers Establish Freight Scheduling Standards
►Trucking Technology Q&A: Melton's Randy Rhines
►Aurora's Chris Urmson on the Future of Self-Driving Trucks
►Dysart: Using AI to Chat With Your Database
►Clevenger: Why a Down Freight Cycle Is Ideal for Tech Investment
Explore the Issue!
Freight brokers that gained business due to their access to capacity when available trucks were scarce must now provide value to their customers in other ways, said Jason Roberts, senior vice president of enterprise operations at Mode Global.
“Your value proposition as a broker has to change when the market down cycles like it has today,” he said. “Capacity is no longer king.”
As an example, Roberts encouraged logistics companies to hold quarterly business reviews with their customers, regardless of size, to provide them with deeper market insights.
“What else can you bring to the table from a value-add standpoint?” he asked. “It is all about how you can be a differentiator in this marketplace.”
Dallas-based Mode Global ranks No. 25 on the Transport Topics Top 100 list of the largest logistics companies in North America.
As transportation businesses set out to improve their operations and lay the groundwork for future growth, technology deployments will be essential.
Neon Logistics’ Feldhacker encouraged companies to view technology implementation as a continuous process, not a one-time investment.
As a company grows, so will its technology needs. At the same time, technology will continue to advance at a rapid pace, yielding new capabilities and greater efficiency.
“Make sure that you’re buying the right tech for you,” Feldhacker said. “Technology is a journey.”
Want more news? Listen to today's daily briefing below or go here for more info:
