3PLs Persevere Through Down Freight Market, TIA Leaders Say
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PHOENIX — Third-party logistics providers have persevered through a tough freight market while also taking action to stem a rising tide of fraud in the transportation sector, 3PL industry leaders said.
Those twin issues of challenging market conditions and fraud prevention dominated the discourse at the Transportation Intermediaries Association’s 2024 Capital Ideas Conference, held April 10-13.
“When is the freight market truly going to rebound, and will the onslaught of fraud ever, ever slow down? This is top of mind for us at TIA,” said Anne Reinke, the association’s president. “A robust freight market not only helps our members, but it helps our carriers, our customers and most importantly the nation’s economy. And relentless fraud harms everyone — the 3PL, the carrier and the consumer — and it has the potential to destroy the 3PL’s reputation.”
The freight market has been on a roller coaster ride since the onset of the COVID-19 pandemic, Reinke said.
TIA President and CEO Anne Reinke says 3PLs have been challenged by a sluggish freight market and outlines TIA’s efforts to combat fraud in the marketplace, which hurts the carrier, the 3PL and the consumer and damages the industry’s reputation. @tianetdotorg #TIA2024 pic.twitter.com/7TLoUItcf8 — Seth Clevenger (@SethClevenger) April 11, 2024
An influx of new freight brokers and carriers entered the industry coming off the “volume tsunami” of 2021, but as conditions softened in the years that followed there has been a significant decline in the number of brokers and carriers registered with the Federal Motor Carrier Safety Administration.
“This market right-sizing is painful,” Reinke said. “Regardless of whether it makes sense to get rid of some of the excess capacity in the marketplace, these closures obviously hurt people.”
At the same time, unpredictable events such as the collapse of Baltimore’s Francis Scott Key Bridge and the Panama Canal drought have continued to test the resiliency of the supply chain.
Technology vendors exhibit software and services for 3PLs at TIA’s 2024 Capital Ideas Conference on April 10-13 in Phoenix. (Seth Clevenger/Transport Topics)
“The past four years have shown that the global supply chain is prone to disruption, but also innovation,” Reinke said.
Along the way, logistics providers have continued to adjust, improve and adapt.
“We have proven our utility during the worst of the supply chain dysfunction, and our customers have not forgotten that,” Reinke said. “If there is any word to describe our industry, it is resilient.”
At the same time, logistics firms continue to grapple with scammers and the increasing prevalence of fraud in the freight marketplace, including cargo theft, carrier identify fraud and double brokering, in which a criminal posing as a carrier accepts a load, then illegally re-brokers it to a legitimate carrier.
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To help address this problem, TIA established a fraud task force last year to educate members on best practices to reduce risk, highlight the damage caused by freight fraud and boost industry advocacy on this issue.
“Our goal is to change the lack of enforcement from our federal partners,” Reinke said. “We are not waiting for the government to act — we do not have that luxury — but we are doing all that we can to help our members raise the attention on this issue so it doesn’t metastasize to an even bigger, untreated problem.”
TIA also is working on a data collection effort to gain a clearer understanding of just how much time and money 3PLs are spending to address fraud.
Meanwhile, technology adoption continues to transform the way logistics firms operate their businesses.
TIA Chairman Mark Christos discusses market and technology trends at TIA’s 2024 Capital Ideas Conference in Phoenix. (Transportation Intermediaries Association)
“Our industry is moving at a faster pace than ever before,” TIA Chairman Mark Christos said.
He described technology as a key enabler for 3PLs as they work to meet customers’ higher expectations and improve the way they work with their carrier partners.
TIA’s exhibit hall featured 94 vendors showcasing a variety of software and services geared toward freight brokers and 3PLs.
Christos, who is president of logistics and technology firm SolvLogix Inc., also added perspective on the current freight market.
Although business conditions have been unfavorable for the past couple years, the TIA Market Report found that 3PLs actually performed better as a group in 2023 than in the pre-COVID years of 2019 and 2018, he said.
“The marketplace in the past 18-24 months has certainly created unique challenges but has also made us better for the future,” Christos said.
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