As 2017 kicked off, the nation’s trucking carriers were encouraged by the promise of increased trade. However, by and large, they have yet to see the benefits materialize in earnings. Carriers must become smarter about their use of technology and act quickly to weather today’s soft market—while at the same time, preparing themselves for a profitable future.
Despite the influx of trade occurring at U.S. ports early in 2017, The Wall Street Journal reports that many of the largest fleets in trucking have shown first-quarter profits below their initial projections. The blame for these earnings falls on lower shipping rates caused by weak volumes and excess capacity.
Oversupply of trucks and lowered shipping rates are a part of the business, and although unfortunate for carriers, they’re sometimes unavoidable. Still, it doesn’t have to result in carriers failing to meet quarterly projections—they simply need to rethink their strategies for combatting the issues that accompany excess capacity.
Technology i ncrease s e fficiency
In periods of soft demand, carriers need to function at their most efficient levels. Since increasing prices isn’t an option without the demand to facilitate higher rates, carriers must limit wasted resources at every step of the transportation process to pick up the financial slack.
Drivers must be able to make more pickups in less time. That means eliminating dock congestion and the lost resources and costly delays that come with it.
Technology not only makes those things possible, it eliminates the errors that occur when processes like paper-based billing and invoicing are done manually. The end result is that customers will ultimately tender more freight with carriers leveraging technology because of these benefits.
The latest technological revolution is coming at just the right time, when the industry needs increased efficiency. Using increased efficiency to combat excess capacity and lower shipping rates is possible with the right technology in place.
Data transfer, increased visibility, and tight customer linkage are key areas in which carriers can innovate very quickly. Carriers need quick-to-implement solutions that replace Electronic Data Interchange (EDI) and paper-based communication. An Application Program Interface (API) approach provides just that by introducing state of the art automation and visibility to the logistics and transportation industry.
When connected to a cloud-based API network, carriers can reduce customer setup time from months down to days, while eliminating costly EDI backlogs. With API infrastructure in place, carriers are also immediately able to transfer real-time data to customers. During the process, data can actually be enriched with things like weather and traffic updates. This provides shippers and 3PL customers with more valuable information than ever before. It also helps keep carriers on-time to avoid non-compliance costs and on-budget to further maximize revenue and cost savings.
Overall, the use of APIs brings carriers online—away from time-and-labor-intensive manual processes and directly to automation. Once turned on, APIs immediately enable real-time visibility and communication capabilities with customers. This makes carriers more competitive and easier to work with from a customer’s perspective, increasing the carrier’s ability to remain competitive, weather the current soft market, and create a platform for enhanced profitability in any market.