Shippers say simplifying supply chain practices key for 2017

An annual survey conducted among nearly 2,200 shippers by trucking conglomerate Averitt Express finds a majority are “optimistic” about freight volumes heading into 2017, with more seeking ways to “simplify” their supply chain practices, which includes cutting back on the number of motor carriers they contract with.

“We are seeing a growing interest among shippers to simplify their supply chain practices, particularly when it comes to the number of carriers and service providers they use,” Phil Pierce, Averitt’s executive vice president of sales and marketing, told Fleet Owner.

“Nearly a quarter of our survey respondents said they want to streamline to fewer carriers in 2017; an increase of nearly 2% from 2016,” he added. “The notion that the cheapest rates will always win the prize is being challenged more and more by a growing demand for reliable, quality service and simplicity.”

Pierce added that the company’s survey is showing more “optimism” among shippers are optimistic about this year, which he believes “is always great news” for motor carriers.

“Nonetheless, we still face a number of risks that will determine whether or not this year will be better than the last,” Pierce stressed. “From the driver shortage to changing technologies, carriers will need to be bold and innovative in 2017. This is certainly a year of opportunities that carriers shouldn’t take for granted.”

Some of the other findings from Averitt’s survey include:

The primary service challenge for 44% of those shippers surveyed involved freight damages in transit. Rate increases and on-time service were also rated as major challenges, polling at 38% and 39%, respectively.

Fewer shippers will be looking to use intermodal services in 2017, according to Averitt’s survey. While there was only a 4% decrease in respondents that said they would be using rail services, shippers that said “No” jumped sharply by 17%. From 2016 to 2017, those that were at least interested in potentially utilizing intermodal services declined b

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y 13%.

Nearly 40% of international shippers said that China was their primary source for imports.

Yet while China continues to dominate the imports category, cross-border trade with Mexico is steadily gaining ground. In 2016, 15% of the shippers polled by Averitt elected Mexico as their top import source; a 5% increase compared to 2015. By contrast, China’s import growth went up just 1%. Other countries with stronger growth in 2016 as reported by those polled in 2016 were India (+3.5%) and South Korea (+2.5%).

With President-elect Trump promising to overturn trade policies between the U.S. and other nations, 57% of those shippers surveyed said they are “unsure” of how they will be affected. On the other hand, nearly 30% said they foresee a positive year for international trade compared to just 13% that believe changes to policies could be harmful.

“Results from the survey indicate a relatively optimistic lookout for the year ahead,” noted Averitt’s Pierce.

“However, with big promises to change trade rules and rebuild U.S. infrastructure, supply chain players will have to be attentive and proactive to change,” he stressed. “That’s why having a better understanding of shippers’ needs and challenges will allow us to provide better support in key areas that the survey identified.”

[To download a copy of Averitt's survey, click here.]