Executive Briefings

Managing Freight in a Challenging Economy

The economic crisis has provided shippers a great opportunity to step back and rethink their logistics and supply chain operations to see where they can pull costs out of the system and become more efficient, says consultant Dan Goodwill. "Everyone knows that beating up on carriers to bring costs down can't go on forever."

Goodwill says he saw examples during the recession where strong shipper-carrier partnerships paid off, which shippers showing a willingness to work with carriers. "We saw some shippers bring their carriers in to explain the pressures they were under and to see how they could work together to bring costs down," Goodwill says. "But there were also a lot of shippers shopping around and many who used the recession to leverage competitors to force cost reductions from their incumbent carriers."

Goodwill, who is president of Dan Goodwill and Associates, thinks that 2010 will be a "long, bumpy and winding road." Early in the year, he says, "I would expect to see some carrier consolidations," noting there "still is a lot of price competitiveness in the market." As the year progresses, "I expect we will see some upward pressure on prices and businesses will stabilize somewhat. As we get toward the end of the year, we should be moving in a more positive direction."

Goodwill does not anticipate a serious capacity shortage any time soon. "A lot of trucks were parked so there is still a great deal of unused capacity out there," he says. "I generally think capacity will come back in line with the increase in freight volumes - though those events may not be totally calibrated."

To view this video in its entirety, click here.

Goodwill says he saw examples during the recession where strong shipper-carrier partnerships paid off, which shippers showing a willingness to work with carriers. "We saw some shippers bring their carriers in to explain the pressures they were under and to see how they could work together to bring costs down," Goodwill says. "But there were also a lot of shippers shopping around and many who used the recession to leverage competitors to force cost reductions from their incumbent carriers."

Goodwill, who is president of Dan Goodwill and Associates, thinks that 2010 will be a "long, bumpy and winding road." Early in the year, he says, "I would expect to see some carrier consolidations," noting there "still is a lot of price competitiveness in the market." As the year progresses, "I expect we will see some upward pressure on prices and businesses will stabilize somewhat. As we get toward the end of the year, we should be moving in a more positive direction."

Goodwill does not anticipate a serious capacity shortage any time soon. "A lot of trucks were parked so there is still a great deal of unused capacity out there," he says. "I generally think capacity will come back in line with the increase in freight volumes - though those events may not be totally calibrated."

To view this video in its entirety, click here.