Are we driven by FEAR?

By | July 14, 2015


I enjoy reading the posts by Kevin O’Meara at 10x Logistics – you should too (The 10xLogistics Blog). He has highlighted some press items that stemmed from our recent State of Freight webinar (Key Transportation Issues You Need to Know – Click here to view a replay of the event. You will have to submit a simple form to get in). In it he takes us to task for sounding the alarm bells about a transportation crisis and thinks that we are advocating that shippers ‘pre-pay’ for capacity ahead of this event. If Mr. O’Meara had seen the full webinar I think he might have noticed that we actually highlight that pricing may be soft for the duration of this year. That doesn’t sound like pre-paying to me! Instead of ‘pre-pay’ I propose that they ‘pre-pare’. I’m going to flip FEAR on its side and hopefully help everyone understand how, and why, we look at the markets the way we do.

F – Face the Facts
– The truck market is a highly fractured industry with numerous vertical and horizontal segments split between large for-hire, small fleets, independents, and private fleets. FTR may be the only place where we can fully quantify the effects of regulations on this diverse group. The regulatory environment is a huge component of the marketplace going forward. We need those facts in order to prepare for them.

E – Educate our Clients
– Our clients are representative of that very diverse group, either as carriers or as shippers utilizing those carriers. They want the best information available. They NEED the best information available. FTR gives them the best insight into the current environment. As long-time forecasters we understand the risks of projecting into the future and have developed nearly 3 decades of research and analysis to help our customers understand what the market is currently doing and where it is likely to be headed.

A – Assess the Risks
– Once we have quantified the market and the risks we have to take one further step and that is to qualify those risks and outlooks. This is a vital step that many organizations leave out. There are many risks in the marketplace, but some of them are more important than others. Since we are able to quantify the impacts of both the freight and regulatory demands we have a unique ability to help you understand the potential of those risks to disrupt your business. If pricing changes from 2% to 5% – businesses can find a way to handle it. If pricing moves from 2% to 15% – that is a disruptive event that needs to be clearly understood.

R – Reality drives Decisions
– Just as there are a diverse group of companies there will be a diverse set of challenges and ways to deal with those challenges. Every company has to set an operations and pricing strategy that works for their clients and their organization. No two will be alike. It is our goal to give them the proper perspective to help them make those decisions.

Lastly, I don’t fault the press for highlighting the more dramatic elements. It’s exactly what you would do if your job was to catch eyeballs and highlight important aspects of the marketplace. Our clients are looking at the more nuanced view of the marketplace – both short and long-term. We have to deliver it to them so that they can prepare for the future possibilities.

I look forward to hearing your thoughts and comments. Contact me any time: @JonStarksFTR -or- jstarks@ftrintel.com


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Category: Freight Focus

About Jonathan Starks

Jonathan has spent his entire career in the freight transportation sector having joined FTR in 2001. His expertise includes freight modeling, modal analysis, fleet characteristics, and equipment demand. He is directly responsible for producing FTR's more than 13 million datapoints and 85,000 forecasted dataseries each and every month.