Executive Briefings

Trends in Transportation, 2015

Tom Sanderson, chief executive officer of Transplace, joins us in a discussion of the trends that are affecting the transportation landscape in 2015 -- and how they differ from what the industry experienced in the previous year.

The early months of 2015 were "quite different" from the last half of 2014, Sanderson says. Freight flows were "not nearly as strong so far." As a result, capacity shortages were less common.

“So far this year, it has been a little bit of a breather,” Sanderson says. But he expects freight volumes to pick up later in the year, especially during the peak shipping seasons.

This year got off to a better start than 2014, when shippers and carriers were plagued by severe winter weather. Even the labor slowdown at West Coast ports in the early months of 2015 didn’t match the problems of a year earlier. As 2015 began, Sanderson says, the industry was seeing a better balance between capacity and demand.

Memories can be short, however. Sanderson says shippers and carriers can learn from the most recent downturns. The key is not to panic. “You see retail sales getting soft, a huge decline in auto sales, and a tremendous decline in housing starts, but we know that’s a temporary event and that cycle is going to go back up.”

Shippers shouldn’t react to the crisis of the moment by abandoning their long-term supply-chain strategies, or by making major changes in the location of their distribution centers. “It’s not a call for fundamental change,” says Sanderson. “It’s a call for fine-tuning.”

He believes it’s a mistake to shift freight volumes from intermodal to long-haul truck in a recession. The over-the-road driver shortage is still a major problem, “so it doesn’t make sense to be shifting that mode mix in response to what is a temporary reduction in over-the-road truck pricing.”

To view the video in its entirety, click here

 

The early months of 2015 were "quite different" from the last half of 2014, Sanderson says. Freight flows were "not nearly as strong so far." As a result, capacity shortages were less common.

“So far this year, it has been a little bit of a breather,” Sanderson says. But he expects freight volumes to pick up later in the year, especially during the peak shipping seasons.

This year got off to a better start than 2014, when shippers and carriers were plagued by severe winter weather. Even the labor slowdown at West Coast ports in the early months of 2015 didn’t match the problems of a year earlier. As 2015 began, Sanderson says, the industry was seeing a better balance between capacity and demand.

Memories can be short, however. Sanderson says shippers and carriers can learn from the most recent downturns. The key is not to panic. “You see retail sales getting soft, a huge decline in auto sales, and a tremendous decline in housing starts, but we know that’s a temporary event and that cycle is going to go back up.”

Shippers shouldn’t react to the crisis of the moment by abandoning their long-term supply-chain strategies, or by making major changes in the location of their distribution centers. “It’s not a call for fundamental change,” says Sanderson. “It’s a call for fine-tuning.”

He believes it’s a mistake to shift freight volumes from intermodal to long-haul truck in a recession. The over-the-road driver shortage is still a major problem, “so it doesn’t make sense to be shifting that mode mix in response to what is a temporary reduction in over-the-road truck pricing.”

To view the video in its entirety, click here