How to ensure availability of carriers in the supply chain?

The upcoming Christmas season and consumer habits related to it make the demand for transport services increase. This, in turn, poses a challenge to shipping and forwarding companies because, despite the growing demand for transport, the number of trucks on the market is insufficient. How to deal with this issue?

Decrease in available vehicles

The downward trend of available vehicles on the popular Poland – Germany route is indicated by the Transport Demand Index from Metrix Trans.info – an analytical tool. It is integrated with the Trans.eu Platform data.

Transport Demand Index, Poland-Germany, 1.01 – 11.11.2020. Source: Metrix Trans.Info

 

For several months now, we have also seen a clear increase in demand, i.e. the need for transport, which is not sufficient in relation to supply. In result, freight rates are growing.

Freight rates, Poland-Germany, 1.01 – 11.11.2020. Source: Metrix Trans.Info

 

  • Piotr Roczniak
  • Global Account Manager, Trans.eu
  • The upcoming year will be the time of challenges in the transport sector, where we have been observing an increase in demand for available vehicles for a long time. What is more, their availability is not growing fast enough. It shows a gap between demand and supply. The reasons for this situation can be found in many areas. I would mention two of them, which are crucial here: insufficient availability of drivers and the lack of proper long-term and partnership-based cooperation between shippers and carriers.

How to build a competitive advantage?

At the moment many companies use some traditional solutions: they get in touch with contractors by phone or via e-mail and are quite sceptical about any modern tools. Such habits build a barrier to the growth of a company.

Today, automation is a must when it comes to the development of a company and gaining a competitive advantage. It is also a way to react dynamically to any changes on the market and optimize costs. If company owners do not adjust their businesses to the new standards of work and changes on the market, they will find it difficult to operate on a daily basis. Modern systems allow for the management of multiple tasks simultaneously and reduce the occurrence of the so-called human errors. This obviously translates into shorter lead times and is beneficial to satisfaction, effective work and better relations with clients.

How to work with carriers?

Despite the growing demand, an insufficient number of trucks constitutes one of the key issues. Shipping and forwarding companies need a stable supply chain and cooperation with trusted carriers.

On the one hand, forwarders aim to ‘possess’ a carrier, says Piotr Roczniak. On the other hand, in many cases, they distance themselves from his financial and organizational situation. In my opinion, it is a big mistake. For forwarders who want to develop and understand the need of digitization of the supply chain (including their own processes), good carriers are, or soon will be, hard to find. It means that if the forwarder wants to keep access to his current carriers and acquire new ones, he must seek to shorten payment terms as much as possible and simplify settlement methods at the same time. When competing for a carrier (regardless of whether it is a regular or one-time cooperation), the key will be to ensure that the carrier has access to money not only on time, but even before the due date. It is important to mention that the tools used so far (e.g. skonto) will be insufficient.

Cooperation with carriers through the Trans.eu Platform allows building long-term relations based on trust. The forwarder is also equipped with a set of tools which help him gain a competitive advantage. They include, among others, a quick payment function – QuickPay, which shortens the payment period to a minimum, as well as direct contact with the carrier owing to automatic translation in the messenger. Work with the group of trusted carriers in the Contractors module allows efficient and effective transport planning, as well as increases security of an entrusted load. What is more, the work automation tools let one organize transport faster and easier and adapt more efficiently to the changing market conditions.

 

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