With the stagnant economy and the impasse in Washington, putting together a business strategy for 2014 has been a challenge. Each hauling segment, region, and lane is going to have its own set of circumstances. To forecast freight volumes in 2014, here’s a list of questions to which you need answers:
- What’s the current unemployment rate for the area you serve?
- What portion of gross national product does the area contribute?
- Is the area in growth or decline?
- Is there any new industry beginning in 2014?
- Were there any plant closings in 2013?
- Are there any plant closings expected in 2014?
- What were the outbound freight numbers for 2013?
- What were the inbound freight numbers for 2013?
- What’s anticipated for those freight numbers in 2014?
Also, check for the same information in areas and lanes adjacent to your current service area. With all this data, you should start to see a picture of what you can expect in freight volume in your sector as you move into 2014.
The next part of developing your 2014 forecast is to look at what’s changing in the way shippers conduct their business. Before you start any negotiations with your shippers or freight brokers, be aware of the following:
- Are they looking at what it will cost them to hold inventory rather than continuing to operate with their current just-in-time shipping methods?
- Are they looking to set up shop closer to their customer base to reduce the distance product is transported in order to shrink fuel costs?
- Are they looking to consolidate raw material sources and have them located closer to the manufacturing facility?
- Are there ways for them to ship directly to customers? This reduces the number of times a product is handled and the amount of fuel necessary for transport.
- Are they redesigning product packaging so it takes up less space and weight, saving cubic feet in shipping?
Finally, take a look at your operation. How was business in 2013? Did it increase, decrease or stay the same? What was the trend line throughout the year? This will help establish what 2014 will look like.
- Are your sales growing, flat-lining or declining?
- What seasonal or cyclical factors are typical for products or commodities you haul? Have they, or will they, be changing?
- How is your availability of loads affected by swings in general economic activity? Increases in fuel costs can lead to a decrease in sales for your customer, thus causing a drop in loads for your company.
- What are you doing to increase sales? (e.g., a marketing campaign to locate new customers)
- Are your customers indicating that the number of loads they ship will increase or decrease in 2014?
- What have they done in the past during similar economic conditions?
- Creating models of what could occur and a viable action plan for each one will help you weather financial storms.
Prepare for the worst and have options laid out for improving conditions. At the very least, you’ll keep it between the ditches for 2014.
Contact Tim Brady at 731-749-8567 or at www.timothybrady.com
