October 3, 2023

Check Call: Bid now, don’t wait


Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EDT. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.

In this edition: It’s not your mama’s bid season this year; Shippers are on the hook for carbon emissions; and UPS tries to get customers back on their side.

Gif: Tenor

It’s not going to be fun and games for the fourth quarter, the unofficial bid season in less-than-truckload freight. As we predicted with the demise of Yellow, bid season will be a little bit different this year, now that that freight has been absorbed and dispersed into the network.

Shippers that are looking to take freight out to bid at the end of the year should consider sending out their RFPs sooner rather than later. The dust has settled and shippers are looking for a more permanent solution to the post-Yellow problems. Sure the freight got moved for now but if the new carrier isn’t the right fit, everyone will be bidding out freight again, driving rates up. 

Morgan Stanley recently released a report finding that 35% of shippers and brokers are going to find a new carrier for their network. Half are expected to do it this year and the other half in the beginning of next year. “Sixty-nine percent of brokers said a change would be made this year while 60% of shippers said they would wait until the first half of next year.”

Bid season this year won’t be for the faint of heart. Get those bids out now and save everyone the hassle of trying to return bid responses over Thanksgiving. Trust me: No one enjoys that. 

This week on Check Call the show, we talk to Rob Cook, CTO at Sheer Logistics. We break down the new regulation in California about disclosing Scope 3 carbon emissions. The full episode is here

It’s actually a timely topic as there has been talk about ROI as it relates to sustainability. Aside from the big one, such as the Earth still being habitable. There are some that can actually affect the bottom line.

Working more proactively on developing and hitting sustainability goals will help immensely in the long term. Fewer natural disasters that interrupt supply chain operations and less likelihood of decreased water levels that make it difficult to transport goods via the ocean — kind of like what is happening with the Panama Canal — come to mind.

A 2022 Dartmouth University study estimates business costs worldwide from rising temperatures over the period from 1992-2013 at $16 trillion — a loss of 1.5% of GDP per capita in developed economies and 6.7% in emerging markets. The U.S. National Oceanic and Atmospheric Administration estimates damage from $1 billion-plus climate events of all kinds since 2000 — storms, fires, freezes, floods, droughts — at more than $2 trillion.

While some shippers may be hesitant, a start, no matter how small, needs to happen. There can’t be an improvement in carbon emissions without first knowing where you stand. It’s not unlikely that additional states could adopt legislation similar to California’s; it has happened countless times in regard to supply chains.

Also as more and more of these types of regulations come down, imagine the value add a 3PL or 4PL would have with shippers if there were already a solution developed that just happened to fit right into a shipper’s current setup? That would be a pretty easy sale — to have the solution to a problem a shipper didn’t know it had.

TRAC Tuesday. This week’s TRAC lane goes from Allentown, Pennsylvania, to Charleston, West Virginia. This 439-mile trip has had some spot rate volatility in the past month as rates started at over $2 per mile, dropped to $1.85 and shot back up to just under $2 a mile. The National Truckload Index is at $2.27 so rates on this lane are a little less than the national average despite the tightening capacity in Allentown putting upward pressure on spot rates. 

(Gif: Tenor)

Who’s with whom? Baby come back. UPS is asking customers to come back. Those that left the Atlanta-based parcel company as a result of the threatened strike over the summer were presented with rebates to come back. These rebates are being offered to offset early-termination penalties for customers to break current contracts. No price tag has been added to these rebates but if you’re curious, UPS would love to chat about it.

FreightWaves’ Mark Solomon wrote, “UPS lost about 1.2 million daily parcels as shippers concerned about service disruptions shifted traffic to other carriers. Rival FedEx Corp. received about 400,000 of the diverted parcels. The rest were split among the U.S. Postal Service and an array of regional delivery carriers.

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The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.

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