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DC Velocity: “Despite Calls for Collaboration, Truck Shippers Seen Sticking to the Same Old Script”

August 24, 2016

Despite calls for collaboration, truck shippers seen sticking to the same old script

For shippers, extending themselves to their carriers only goes so far—if it goes anywhere at all.

In recent years, trucking executives have been preaching to shippers the virtues of a more collaborative relationship to help supply chains run more efficiently and to provide relief to their hard-pressed drivers. The attempts at friendly persuasion have often been accompanied by a not-so-subtle message: Those who co-operate will have capacity available to them at competitive prices during periods of tight supply, while those who don’t may get left by the side of the road.

The pleas and warnings have mostly fallen on deaf ears, however.

Indeed, there are shippers that extend themselves for their carriers because they think that it’s the right thing to do, and that some degree of behavior modification makes good business sense. Yet there remains a large body of shippers that have not changed their ways, knowing that with so-so freight demand and with capacity quite ample, they can continue to behave in their own best interests and still find wheels at good rates.

Tom Sanderson, CEO of Transplace, a large Dallas-based third-party logistics (3PL) provider, sees the landscape more clearly than most, and he’s blunt about the current climate. “The shipper is in control,” Sanderson said in a recent phone interview. Shippers willing to work with carriers in a loose capacity environment are doing so because they believe in operating in an equitable setting, he said. They are also buying capacity protection for when the next tightening cycle occurs, he added.

Efforts to force behavioral changes on shippers have largely been fruitless, said Charles W. Clowdis Jr., managing director-transportation, Economics & Country Risk, for consultancy IHS Markit, who has spent decades as a trucking executive and consultant. “We’ve been telling shippers for years to make themselves trucker-friendly, to treat the drivers well, and to be on time,” Clowdis said in an e-mail. Most shippers ignore the advice, he said. “They just push for lower rates and better service.”

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