If there’s one take away from this eventful winter, it’s that truckload capacity is at a tipping point. The impacts of CARB, HOS, driver turnover and other costs were magnified by one of the worst winters in recent memory, pushing rates to new extremes.
Now as we move into (hopefully) quieter weather this spring, expect to see strong demand for truckload capacity for all equipment types, as there is still overflow from the winter, along with a typical gear up in activity.
With tight capacity also comes opportunity, though. Carriers and owner operators can take steps now to make sure they are poised to take advantage of a busy second quarter.
Reserve Capacity for the Spot Market
Load volume and rates typically hit a peak in June and in some lanes, spot market rates even exceed contract rates. If you are able to free up capacity in your fleet that you can dedicate to the spot market, you can take advantage of a market that will likely be strapped for trucks.
That won’t necessarily be the case in every lane, but tools like DAT RateView can help you research lanes with 13-month history of spot and contract rates and load-to-truck ratios. Depending on the lane, you may want to reserve capacity for the spot market even before the June peak.
Find Intermodal Freight & Haul Containers
As capacity tightens, more and more freight is moving to rail-intermodal for long-distance transportation. The weather this winter further accelerated shippers’ growing demand for rail intermodal services, which means opportunity for container hauling is growing at a strong pace.
Small, over-the-road fleets can be successful if they are able to handle longer-distance drayage operations, or if they focus strategically on lanes and cargo types that don't lend themselves readily to intermodal. In intermodal-competitive lanes with commoditized cargo, however, all-truckload fleets will need to cut costs to the bone in order to remain profitable.
DAT RateView now includes intermodal rates that you can compare with your company’s van rates so you can now be aware of when intermodal may be a better option.
When capacity is tight and the market is hot, it’s a great time to research markets where you can reposition your assets to take advantage. It would be a great time to try TriHaul routing through markets with high demand, which can improve your back haul rates drastically.
DAT offers a range of tools to help you identify regions or market segments that offer the greatest opportunities for your business. Carriers may choose to position equipment in geographic areas where trucks are urgently needed.
Categories: Best Practices and Benchmarks