Use Falling Cleveland Trucking Rates to Boost Supply Chain Efficiencies
In the trucking world, the ebb and flow of trucking rates is a certainty in the same way as the tide. It’s just that the particulars aren’t nearly so predictable.
Currently, Cleveland trucking rates are at an exceedingly low rate. This has more than a few carriers concerned, and The Wall Street Journal went so far as to call the current situation a “trucking recession” that may be a warning of bigger problems for the economy. While we’re of course monitoring the situation closely, you don’t last this long in logistics without recognizing that demand and supply are always in flux – and smart shippers and carriers use these lulls as opportunities to improve supply chain efficiencies.
As Northeast Ohio third-party logistics providers offering trucking, warehousing, distribution, packing/kitting/labeling, and CFS services, we are fully aware that demand for on-hire (spot rate) trucks – alongside diesel prices – has been falling for more than a year.
Zoom in, and see that spot market rates in particular have nose-dived – down 77 percent between early 2022 and March 2023, according to the American Trucking Associations. (For those who aren’t familiar, spot market rates are what companies use when they’re booking a one-off truck transport of goods or when their need exceeds their regular contracted capacity.)
But this wasn’t a huge surprise. It was predicted by DAT analytics in 2021 – though in fairness, the downturn ended up being about 15 percent larger than anticipated. However, that led DAT to predict that spot rates are likely about as low as they’re going to get, so we may see them start to increase again by the end of the year.
In the meantime, that means it’s a shippers’ market. Our clients can take advantage of this moment to improve supply chain efficiencies in a number of ways. These include:
- Investment in improved operations. Getting your goods where they need to go is often a sizable expense for a lot of firms. Falling trucking rates translates to overall lower transportation costs for shippers. Those savings can be socked away for now, or they can be invested in other aspects of your operations that could use some attention – technology, labor, third-party warehousing, contracted inventory management, etc.
- Boosted capacity. The lower the trucking rates, the greater the capacity for shippers to move goods. For companies whose goods are non-perishable, they may choose to move goods now and store them closer to the last-mile delivery site before truck rates start to climb again (which, inevitably, they will).
- Negotiate lower rates. As longtime providers of Cleveland trucking services, we pride ourselves on always offering competitive rates for our valued customers. But we also recognize that trucking rate declines open the door for possible rate negotiations, particularly for spot market clients and companies whose contracts are nearly up. They might ask for faster delivery times, cargo tracking, and improved communication as part of the deal. Manufacturers and shippers can reach out to us at any point to make certain they’re getting the best possible rate for the services they need.
- Better reliability and faster deliveries. When you lock in higher capacity at lower rates, you can ensure delivery deadlines are met more consistently – leading to better customer satisfaction, brand loyalty, and competitive advantage.
The reality is that trucking – as a transportation mode – isn’t going anywhere anytime soon. It may evolve, costs may rise and fall, need will fluctuate – but it’s here to stay. It’s the current trucking rates that won’t hold steady forever. That’s why we urge existing and prospective clients to capitalize on the current rates while they can.
For more information on Trucking Services in Cleveland and throughout Northeast Ohio, you can reach On Time Delivery & Warehouse by calling (440) 826-4630 or by sending us an email.
ATA American Trucking Trends 2022, American Trucking Associations
More Blog Entries:
7 Tips to Picking the Best Cleveland Trucking Service for Your Business, March 30, 2023, Cleveland Trucking Companies Blog