The rising cost of goods and decreased consumer spending have created a soft freight market characterized by excess capacity and low rates. This trend is reflected in the 22.4% year-over-year decline in shipments during Q2 2024, underscoring the slowdown in demand that continues to affect the transportation industry.  

While the current landscape has tempted shippers to focus solely on short-term cost savings, signs of a tightening freight market indicate the need for a different approach. To prepare for future market shifts, shippers must leverage data, technology and market expertise to identify strategic carrier partners that align with their network priorities. By using this approach, shippers can strengthen relationships with the right carriers and support long-term supply chain resilience.  

Staying Ahead of the Freight Market Flip 

The soft freight market has left many carriers with more capacity than they can fill, driving down prices and providing greater leverage in negotiations for shippers. However, now is not the time to capitalize on short-term gains, because there’s almost certainly a freight market flip on the horizon.  

With inventories returning to normal levels, and potential interest rate cuts that could support increased economic activity, shippers will likely see an uptick in freight demand as they restock ahead of peak season. This shift could soon reduce competition among carriers, increase costs for shippers, and make it difficult for them to secure capacity. 

As with any market shift, it’s crucial to prepare for these challenges in a sustainable fashion. By investing in strategic relationships with carrier partners, you can effectively manage cost and maintain service quality, even as the market evolves.  

Strategic Carrier Partnerships: Defining Your Criteria 

Identifying the right carriers that match your network and strengthening these strategic relationships can position you to more effectively navigate future market shifts and challenges.  

However, your criteria for a strategic partner may differ from another shipper’s requirements. So, you need to define what a strategic partnership means for your network, using criteria that’s most relevant to your organization. 

Read More: Are Container Freight Contract Derivatives Finally the Solution to Market Volatility? 

Alignment with network needs. Instead of relying solely on brokers, in which case you lack control over who moves your freight, consider partnering directly with asset-based carriers that fit within your existing logistics network. This approach allows for more strategic decision-making in selecting carriers that meet your specific operational needs.  

For example, choosing carriers that create completed loops and manage backhauls can help reduce empty miles while boosting efficiency and cost-effectiveness. If you frequently ship goods to difficult-to-access locations, you can identify carriers with established routes in those regions to improve service levels and reduce costs. Several carrier search technologies exist today that simplify this process and provide direct visibility into reliable options.  

A focus on performance metrics and continuous improvement. You may have long-standing partnerships with carriers, but when was the last time you evaluated them objectively? While past successes and rapport can be beneficial to partnerships, quantifying carrier performance can both validate and maximize their value. 

Establish clear key performance indicators (KPIs) based on what matters most to your business, such as delivery times, service reliability or safety scores. By benchmarking your carriers against well-defined metrics, you can identify areas for improvement, recognize top-performing partners, and make data-driven decisions to ensure carriers are contributing positively to your supply chain efficiency.  

Data and technology also play an important role in optimizing carrier partnerships. Leveraging a transportation management platform tailored to shippers that offers real-time visibility into shipping operations and actionable recommendations enables you to continuously improve these relationships and adapt to market changes.  

Transparent risk identification and contingency planning. Changes in market conditions demand agile operations, and effective contingency planning can help you remain agile when disruption strikes. Although it’s essential to identify potential risks and weak spots in your supply chain and develop internal plans to address them, extending these conversations to your carrier partners can be highly beneficial.  

Mutual collaboration with carriers empowers you to develop robust contingency plans that make both parties more resilient. For example, you might establish a contingency plan for a sudden disruption that allows you to pivot to an alternative carrier within your network. Have these discussions ahead of peak season, in order to ensure you and your carriers are prepared to maintain flexibility amid new challenges and market shifts.  

Position Your Business for Resilience with Strategic Carrier Partnerships 

With a potential market shift looming, agility must remain a top priority. This means identifying what matters most to your shipping operations — whether it’s reliability or cost — so you can establish clear criteria for a strategic carrier partnership.  

Investing in these relationships now will yield long-term benefits when the market tightens, and carriers face capacity constraints. Strong, well-maintained carrier and technology partnerships will position you to secure the resources you need to navigate future challenges, no matter what the freight market throws your way.  

Jared Spude is VP of freight solutions at Breakthrough.