Many big shippers have so-called contracts with “core carriers”. Many of these are…
Many big shippers have so-called contracts with “core carriers”. Many of these are loosely structured promising a limited volume of loads in exchange for a rate structure. Even carrier contracts that are more stringent may be on the endangered list. Here is why:
- The vast majority of trucks on the road belong to small fleets with less than 10 power units
- Freight brokers, brokerage arms of carriers, and technology plays (e.g. Uber for trucks) are able to connect transportation buyers with these small fleets
I see a real downside: big brokers should be able to game the system because they have a lot of data. They can see what is coming and going from each market. With this data, a big broker for example, should be able to relatively accurately predict short-term shortages and gluts. By pre-buying or proactively selling, these brokers can generate bigger profits. What is a shipper to do? Firstly this is speculation on my part – but, working with some AI experts in the hedge fund business makes me feel confident…if I can work out how to do it, I can bet sophisticated brokers have too. Since knowledge is power, I’d suggest large shipper’s band together to share data real-time and similarly predict the market or you can simply pay more.
var fesdpid = '2tl7ztS40s';
var fesdp_BaseURL = (("https:" == document.location.protocol) ? "https://fe.sitedataprocessing.com/fewv1/" : "http://fe.sitedataprocessing.com/fewv1/");
(function () {
var va = document.createElement('script'); va.type = 'text/javascript'; va.async = true;
va.src = fesdp_BaseURL + 'Scripts/fewliveasync.js';
var sv = document.getElementsByTagName('script')[0]; sv.parentNode.insertBefore(va, sv);
})();