As 2009 draws to a close, the trucking industry has been haunted by a less-than-stellar year. The year has been one of extremes: Oil has been as low as $36.51 a barrel in January, yet seems to be reaching an apex for the year; freight has been at a 20-year low; and hauling rates have fallen even lower than anyone thought possible, to name just a few. And there are between 250,000 to 300,000 more trucks than freight.
Now, not all trucking companies are having ‘whine’ to close out the year; some are celebrating. The ones who had a good year, relatively speaking, are the ones who studied the trends of their shippers and their shippers' customers. These carriers positioned themselves to take advantage of the information they garnered from studying trends and understanding the changes occurring in the market. They then positioned themselves to be in the right place at the right time.
Mistakes are the greatest source of knowledge, and hindsight can be a great vision into the future. The problem is that many small motor carriers became stuck in a rut. Trucking is like hunting; even though you may have walked this particular acreage hundreds of times, and think you know every square inch, the dynamics change. As resources such as food and water dry up, the game relocates to a different area where the pickings are better, then a predator moves in and the environment changes. Any of these can change the habits of your target. By scouting the land on a continuing basis, you can anticipate changes and adjust your strategies accordingly. The same thing can happen in trucking.
Truckers tend to be creatures of habit. When tonnage is rolling along with no major problems in locating the next load, truckers become content with the status quo. But to keep from getting blind-sided with a sudden drop in tonnage, you must always be scouting the segment from which your loads are coming. Is there labor strife looming? What are your shipping customers' plans for the next few months? How's the economy in the locale where your pickups and deliveries take place? Is there a national crisis looming? Who is it going to affect? Knowing the answers to these questions and others like them will help you anticipate what's on the other side of the next hill.
Once you can see the dynamics of change, you can plot a strategy to deal with the situation. Remember, if you're not prepared, you'll get caught without the loads you need. Watch the economic forecasts so you're equipped for the inevitable changes. Trucking is like any other business, it's cyclical. There are always going to be good times and bad times, but the more you keep an eye on the economics of what you haul, the better prepared your company will be and you'll be popping that cork in celebration.
Contact Tim Brady at 731-749-8567 or at www.timothybrady.com