COVID’s Dangerous Impact on Trucking Revenue
When it comes to essential industries, logistics is one of the most important. Without freight moving across the country on a daily basis, people would not be able to easily purchase vital goods such as food, clothing, and medications. Logistics companies are responsible for bringing in goods such as medical devices, personal protection equipment, and hospital beds, and it becomes even clearer that we need trucks on the road now more than ever. Unfortunately, some companies are taking advantage of the overall shortage of freight.
Many freight brokers, realizing that non-essential industries are shut down and that there is less overall freight available, are charging shippers the same but giving carriers rock bottom rates who now have fewer shipments to choose from. It’s not uncommon to see shipments being offered for less than half of the fair market rate. However, the costs of maintaining a truck and running a trucking company have not gotten any lower. If such practices from brokers continue, many drivers will not be able to afford to make their payments, and carriers would be forced to shut their doors.
It should be clear why this is a dangerous precedent to set. There is already a shortage in truck drivers, and if we lose a significant number more, shippers could experience major capacity issues in the future. This would lead to an overall increase in rates over time, as well as a strained supply chain across the nation. It is important not to be short-sighted when evaluating your shipping rates, as a stark decrease now could be offset by higher rates and fewer options in the near future. Shippers can help stop such practices by seeking out and working directly with carriers to build mutually beneficial relationships in order to minimize volatility and maintain some level of stability during these trying times.
At Zip Xpress, we understand that you want certainty during uncertain times. We understand that shippers partnering with carriers is the best method of navigating this pandemic, because we’re all in this together. Partnering together will ensure better service for your freight and an optimized supply chain. If you’re in need of a carrier to partner with, we can provide you with custom carrier solutions that will work for your business and ensure your supply chain will continue to run smoothly. To see how, start today with Zip Xpress!