The Obstacle to Growth Is in Six Words: 'We’ve Always Done it This Way'

Industry pundits predict what the market will do in the next 3, 6, or 9 months. Everyone’s got their own idea of when it will rebound, and they build freight strategies around those outlooks. But what will actually transpire? At Transfix, we are predicting a faster turnaround than others out there, but no matter what happens, we want our partners to be prepared.

Carriers, if you’re using the same strategy you’ve used for the past 2 to 4 years, do you expect less pain than you experienced in the current cycle? 

Shippers, don’t forget 2020 and 2021. Yes, the market is down, but when you push down hard on rates and service until it’s a breaking point for carriers, the volatility will return as carriers exit the market. 

Here at Transfix, we approach RFP season with macroeconomic expertise and market analytics by our side. In fact, in an ideal situation, we're able to keep incumbency on your high-service lanes, and here’s why. If we can keep pricing within a certain percentage band and with service remaining high, isn’t that more attractive than putting a lane out to bid, choosing the lowest cost, and possibly sacrificing service? It’s that outcome that can cause headaches and broken trust. 

Our approach might require more time on the front end, but your whole year could be more efficient and collaborative. Too often the case is such that you execute a 12 month bid and a few months in, the routing guide quality is degrading because the market did not meet your expectations, and now more work needs to be (re)done to ensure/increase compliance. 

Then you start over with the same strategy and expect a different outcome? We all know how that's going to end up. 

This is probably the only industry where when the market is down, shippers are paying very little, and they still have sky high service expectations. That’s like expecting a steak at McDonalds. In logistics, you have to choose two of the three: good, fast, and cheap. You can’t have all three. 

A new year is a good opportunity to think differently about freight pricing and partnership. 

If you’re a shipper or carrier and want to learn more about building a better network strategy, email joenorth@transfix.io.