Vertex Transport Blog
Weak Link In Supply Chain: Coronavirus Testing
By Mike Steele, President & CEO, Vertex Transport
April 28, 2020
We’ve all read and heard how important truckers are to keeping America’s store shelves full of needed products. Without them, we’d all be in serious trouble. Many of them are away from home for weeks working long hours and traveling in and out of “hot spots” for COVID-19 across the country. They have trouble finding open truck stops and rest areas. Restaurants. Hand sanitizer. Masks. Gloves. But the hardest challenge they may be facing is adequate testing for the novel coronavirus. And how to self-quarantine or get treatment if they become ill.
In a recent letter to President Trump, the Owner-Operator Independent Drivers Association said, “Urgent and immediate action is demanded to safeguard our nation’s supply chain. Small-business truckers and professional drivers are the vital link to it all, putting their lives on the line for the good of the nation. Truckers are exposed to COVID-19 because of the critical service they provide.”
It is clear that additional testing is needed across all parts of our country. But it is especially true for truck drivers. Other than healthcare professionals and first responders, they’re likely the largest single group of people that are at risk because trucking isn’t a social distancing kind of business. You can’t stay home and make a pickup. You can’t stay home to make a delivery. Products don’t move themselves.
Truck drivers are the least likely group to get COVID-19 testing because of their constant movement and long hours. They may not have a testing facility near them, and these facilities are not equipped to accept anything other than passenger vehicle traffic. So, they have to plan to get tested between 8 am and 5 pm when they’re at home. And we’re guessing that the only truckers who are getting tested are the ones who have already gotten sick.
It’s one thing to lose time from work when you have to self-isolate to prevent from getting ill or spreading the virus. But it’s another when you fall victim to the virus. The isolation and recovery time is then much, much longer. Which means you are away from your truck longer and not able to get that load of freight moving. It will fall on someone else who be overworked and in the same boat as you.
Bottomline: We need more testing for truckers. And we need to find more ways for truckers to see it as a preventative measure, not a reactive one.
***********************************************************
CORONAVIRUS IMPACT ON TRUCKING
By Mike Steele, CEO, Vertex Transport
March 25, 2020
The impact of COVID-19, AKA coronavirus, on the trucking industry is like nothing we’ve seen before. At first, we saw an initial surge in product coming from China and then a slowdown as the factories there began to close as the virus began to spread. Products from China usually represent about 20% of the trucking market here, so that segment of trucking has changed significantly in a short period of time.
Next, we saw an explosion in demand for staples like toilet paper and cleaning products, not unlike what happens after a hurricane hits the Southeast. But without the run on generators. Store shelves have been clearing out and it’s a struggle for retailers to replenish them. That problem backs up in the supply chain to distribution centers and the original points of manufacture. Keeping up with that demand will keep everyone, including those in the transportation community, busy for the near future.
The third phase of this is just beginning or has yet to come. We will be facing the aftermath of the virus where businesses are closing daily (and for how long?) and people are getting laid off from their jobs. Many of those who are still working are now doing so but from home. So, at some point we’ll likely see both supply and demand points decline, maybe significantly, for a period that we can’t yet predict.
Through all this we’ve seen once again that the trucking community is a resilient one. Like doctors and nurses, truckers are on the job continuously getting vital equipment and supplies to where they’re needed – often without regard for personal safety. Working longer and harder than ever before, often without some of the comforts of being on the road like hot meals at truck stops.
For a situation such as this, there is no playbook for how this is going to unfold or come back together again. We can hope it will be relatively short-lived, but we also must be prepared for it to last longer too. Now, more than ever, teamwork between shippers, consignees, their customer and truckers are critical for us to get through this together.
************************************************************
Coronavirus Impact On Freight Markets
By Mike Steele, CEO, Vertex Transport
February 28, 2020
According to the Wall Street Journal this week, the spread of the coronavirus on shipping markets will likely prolong the current U.S. freight slump. However, “analysts say shipping companies may see strong rebound once restrictions subside and companies rush to replenish inventories.”
So does this mean we’re going to continue to feel some pain, but there will be a surge later when all this passes?
The article by Jennifer Smith goes on to say that “transportation operations could see a bump once production in China ramps back up as companies rush to restock depleted inventories.”
This is likely to be true of other economies as the virus continues to spread outside of China, as we have seen the past couple of weeks. Wall Street felt it this week with record drops in the Dow.
“Businesses from apparel brands to makers of toys, cars and electronics say sourcing problems in China are hampering production and could delay shipments of some goods into the second quarter of this year. Quarantines, half-staffed factories and logistical bottlenecks inside China are affecting the movement of both finished goods such as footwear and raw materials from Chinese vendors that supply manufacturers elsewhere.”
But what happens in China also affects us right here in the United States since so much of what we consume or ship involves China.
This means fewer ships docking in U.S. ports to drop off or take on cargo. This means fewer trucks delivering or picking up at these ports. And this means fewer shipments from distribution centers to consumption points in the U.S.
As the Wall Street Journal continues to report, “the slowdown has sent volumes plummeting this month at the Port of Los Angeles, the largest U.S. gateway for seaborne imports from China, and is expected to “drive sustained weakness” in demand for domestic trucking and intermodal service moving freight long distances by truck and rail, Credit Suisse Group AG analyst Allison Landry said in a Feb. 26 research note.”
“Clearly the near-term impact is one of reduced activity not only on international lanes linked to China but also in terms of reduced freight activity in the U.S. given the expected fall off in imported container goods over the next month or longer,” UBS analyst Thomas Wadewitz wrote in a research note.
When all this begins to pass will be dependent on how well the virus can be contained. And how long it lasts before reported worldwide cases begin to diminish. Perhaps only then will shipping markets slowly begin to come back. Is that Q2 2020? Later in the year? We’ll have to wait and see and be prepared for when supply and demand starts returning to more normal levels.
Source: https://www.wsj.com/articles/coronavirus-impact-seen-prolonging-u-s-freight-slump-11582832476
*******************************************************
Top Freight Brokerage Events – 2020
As of January 25, 2020
MARCH 17-19, 2020
Descartes Evolution Global User & Partner Conference
Fort Lauderdale, FL
APRIL 2-3, 2020
TIA 2020 Capital Ideas Conference & Exhibition
Austin, TX
MAY 5-6, 2020
FreightWaves Live- Atlanta
Atlanta, GA
JUNE 16-18, 2020
Reuter’s Events: Supply Chain USA 2020
Chicago, IL
AUGUST 23-26, 2020
in.sight User Conference + Expo
Orlando, FL
SEPTEMBER 15-17, 2020
FTR Transportation Conference 2020
Indianapolis, IN
SEPTEMBER 27-29, 2020
McLeod Software User Conference 2020
Washington, D.C.
www.Userconference.mcleodsoftware.com
OCTOBER 19-21, 2020
DATCON 20
Austin, TX
www.DAT.com/company/news-events/user-conference
OCTOBER 24-28, 2020
ATA MCE Conference & Exhibition
Denver, CO
OCTOBER 28-29, 2020
FreightWaves Live- Fort Worth
Atlanta, GA
************************************************************************
Truck Tonnage: Past and Future
By Mike Steele, President & CEO, Vertex Transport
December 16, 2019
Quoting from a December 20, 2019 article in Transport Topics, “tonnage was extremely volatile in 2019 as tariffs and the trade war with China caused unusual trade and freight volumes.”
The American Trucking Associations (ATA) reported last month that it’s freight tonnage index was up nearly four percent year-to-date when compared to 2018. ATA’s ongoing indicator is largely based on contract freight, which has stayed pretty even. The spot trucking market has been the soft spot and this has had a negative impact on the industry.
Quoting Transport Topics sources again, “the spot market was growing really strong in 2017 and 2018, and now it’s negative. When you compare it to the last couple of years, it’s off 50%. This is where the freight recession resides, on the truckload side.”
So, given the apparent strength of the current U.S. economy, what does this tell us what 2020 could be like?
There are two scenarios. The first, the economy remains strong. If that becomes the case, after several major carriers shuttered their operations in 2019, capacity shortages may come into play again. If that’s the case, spot rates will go up and the spot market will experience some sort of rally.
The second scenario is what happens if the economy falters in 2020? If that becomes the case, the contract freight sector will begin to suffer and join the spot market in a pull back for the coming year.
At Vertex Transport, we’re bullish on the economy and where its headed. As such, that would lead us to believe that the first scenario will play out. If that’s so, then we’re well prepared to help customers find the capacity they need to get their freight delivered as needed.
************************************************
The Thanksgiving Supply Chain
Borrowed from Chris Cunnane; November 21, 2018
“Tomorrow is Thanksgiving, a time for FFFTT – family, friends, football, thankfulness, and turkey. Lots of turkey. According to some reports I have seen, Americans will spend more than $1 billion on the 50+ million turkeys they will consume. Some of the biggest news that I have seen, however, is the technology upgrade that is happening this Thanksgiving. In fact, the country’s three largest turkey brands are making significant changes to their plans to improve the Thanksgiving supply chain.
First up is Butterball. Since 1981, the company has maintained its “Turkey Talk Line,” a toll-free number where customers could ask all the important turkey-related questions that they had. The talk line is open every November and December, with 50+ experts answering over 100,000 questions per season. The most popular questions have included: “can I use a turkey that has been in my freezer since last Thanksgiving?”, “what size turkey should I buy?”, “how long before Thanksgiving should I buy my frozen turkey?”, and “should I wash my turkey?” For those of you wondering, the answers are yes it will be fine, but for the best results, turkeys should be frozen for no more than 6 months; a pound and a half per person is a good rule of thumb; early, as a frozen turkey takes one day in the refrigerator for every 4 pounds to defrost; and you shouldn’t wash your turkey as it risks cross-contamination in your kitchen.
Over the years, the Turkey Talk Line has made a few changes, mostly by means of diversification to connect with more callers. In recent years, these changes have included male Talk Line experts and Spanish speaking experts. This year, Butterball is making its biggest change yet by embracing the new age of technology. Butterball is partnering up with Alexa to provide pre-recorded answers to a number of turkey-related questions. This means consumers can seek help from their Amazon Echo devices rather than calling the actual hotline. And for those customers that prefer to use the old-school method of calling in, Butterball is making life easier as well. Rather than waiting on hold, callers can provide a call-back number for a turkey expert to reach back out directly when available.
Jennie-O, a subsidiary of Hormel Foods Corp. and the nation’s second-largest turkey brand, is also getting more technologically inclined this Thanksgiving. Jennie-O is using new labels that will help to provide traceability for its birds. This feature was a year in the making, with 52 farms currently signed up for the program. The label has a code that can be entered on the Jennie-O website, which will give the customer the region of the farm, pictures of the family, and a quote from the farmer. The company’s tracking program doesn’t include ground turkey, “Oven-Ready” birds or other Jennie-O branded turkey items bought in the meat aisle. Speaking of Jennie-O ground turkey though, a recall due to Salmonella outbreaks on ground turkey meat is not exactly what the company needs heading into Thanksgiving week.
The third largest turkey producer is Cargill, which tested traceability last year. This year, the company is expanding its program for a limited number of its Honeysuckle White turkeys during the holiday season. Cargill’s program worked so well last year that it will quadruple the number of traceable birds this year. Unlike Jennie-O’s traceability program, Cargill’s harnesses the power of blockchain for improved traceability. This gives consumers more detailed information about the origin of their bird, such as the exact name and location of the farm. Consumers can enter a code from the packaging into the Cargill website or via text message to receive the information. Aside from the name and location of the farm, consumers immediately receive any images and other information that the producer wants to share. Cargill has said it will not charge more for the traceable turkeys but will leave pricing up to retailers.
Happy Thanksgiving, enjoy Adam Sandler’s Thanksgiving Song.”
*******************************************************************************************
Getting Started
By Mike Steele, CEO of Vertex Transport
October 21, 2019
A freight broker matches shippers with transportation services in order to move goods. Freight brokers are responsible for matching authorized and reliable carriers to the shippers and coordinating all of the shipping needs for many companies. Brokers must be licensed from the Federal Motor Carrier Safety Administration.
In today’s hot freight market, brokers are constantly looking for eager and competent talent to help with moving freight. Minimum requirements for the job are typically:
- Entry-level education, high school diploma or equivalent
- Good listening skills, with clear speech and critical thinking
When a manufacturer or distributor has a truckload of goods to get to market, freight brokers find a transportation service that can get that freight to a specific location via a motor or rail carrier. Freight brokers work with shippers and carriers and make a margin on each move for their services. Freight brokers negotiate the prices with the shipper and the carrier and make any necessary adjustments to the shipping service in order to get the job done.
Freight broker training courses can be valuable to people interested in pursuing this career. These courses can help entrants learn about contract negotiations, sales techniques, marketing methods, calculating freight rates, broker software, dispatching and tracking loads, factoring, and finding the proper freight and trucks. Some schools offer a week-long course in freight broker training and other agencies offer training courses online. These courses offer a lot of information for individuals interested in getting into the businesses. However, many brokerages provide on the job training that covers these areas, as well. Freight brokers also must have knowledge in the shipping industry and technological resources to help carriers and shippers meet their demands.
According to the U.S. Bureau of Labor Statistics), there were more than 92,000 jobs held by cargo and freight agents in 2018. The Bureau that same year that the mean annual wage for cargo and freight agents was about $46,000. So for those looking to work smart and hard, the payback for those efforts can be found in this industry.
******************************************************************************************
How You Can Prepare Your Business For Hurricane Season
Part 3
By Mike Steele, CEO, Vertex Transport
September 13, 2019
CREATE EMERGENCY RESPONSE TEAMS
When it comes to protecting your people, assets, and locations—it takes a village.
Once you have your plan in place, it’s time to delegate and practice. Don’t forget: an emergency plan is only as good as the people following it. Everyone must have a thorough understanding of what to do in any given scenario if it’s going to work.
Define Clear Roles and Responsibilities
A hurricane preparedness plan will contain several moving parts involving multiple people. Be sure to designate roles to employees who are up to the challenge. Communicate specific responsibilities with each stakeholder and make sure they have the resources and technology they need. Let everyone know who is on each team and who they can look to for specific information.
Train Teams
You have to do more than simply tell people their responsibilities—you must also thoroughly train them. Get the team together to review protocol and answer any questions they may have. As the company evolves, so too should the plan. Be sure to modify it with every new location, expansion, or change to a facility.
Role Play
Practice your plan with mock drills. Role-playing various scenarios may seem silly. But when facing a dangerous, deadly hurricane, team members will be more likely to remember a drill than a bunch of text. You can choose whether to give the team notice or conduct impromptu drills to mimic a real-life emergency.
Hurricanes will happen. The good news: You now have a solid framework in place to prepare your business for a violent storm. Weather experts can forecast hurricanes days in advance, and businesses should use that insight to their benefit. Follow the guidelines above and help your business weather the storm.
Keep Your People Aware
AlertMedia is the leader in emergency communication software. Thanks to two-way messaging, an intuitive user interface, and 24/7 customer support, you can rest easy knowing you’re prepared if a storm is heading your way.
End of Part 3 and Storyline
https://www.alertmedia.com/blog/hurricane-preparedness-for-businesses/
*****************************************************************************************
How You Can Prepare Your Business For Hurricane Season
Part 2
By Mike Steele, CEO, Vertex Transport
August 14, 2019
BUILD YOUR EMERGENCY PLAN
In the panic of an approaching storm, it’s human nature to lose focus. Having an explicit emergency plan in place is crucial to minimizing the confusion surrounding a hurricane.
Your plan should be flexible to account for inevitable changes in people, assets, and locations. It should incorporate basic infrastructure elements that are unlikely to change even as your business evolves over time.
Back Up Your Data
It might feel like a no-brainer, but it’s an easily overlooked practice. Ensure your data is backed up offsite to safeguard against on-premises damage (flooding or fires can destroy on-site servers).
Regular data backups with a redundant system will safeguard your business against loss. If one server goes down, the backup will come to the rescue.
Set Up Cloud Systems
Disaster recovery is why cloud-based systems are the preferred choice for IT professionals. If you have to work from a different location, you want to be certain you can access key business systems and data from mobile devices. This may include payroll, CRM, and HR systems. If you haven’t converted such systems to the cloud, now is the time.
Create Checklists
Build a checklist of tasks to perform throughout the entire duration of a hurricane. Store the list on a cloud application for easy access, but also physically post it where your people can easily reference it if there’s a power outage. Be sure to communicate this list to key stakeholders if you’ll be away or unavailable.
Review Contracts
The aftermath of a major storm isn’t the time to figure out what your contractual obligations are. Proactively review your contracts with vendors, insurance providers, and landlords. There should be specific callouts for weather-related events, damages, and complete loss. If not, notify contract owners directly to find out what their weather-related clauses are.
Map Evacuation Routes
Help your people find the safest way out of their facility to minimize chaos and ensure everyone’s safety. You’ll want to work with facility managers to determine which stairwells and doors should be used, identify parking lot exits, and what surrounding streets should be taken. Post physical maps on each floor to familiarize your people with approved evacuation routes.
Implement a Two-Way Communication System
A potentially life-saving addition to your emergency plan: communication. Ensure every employee is safe and able to communicate during a hurricane both with leadership and with each other. Even if the internet is down due to a power outage, you should still be able to relay vital information to your people.
Emergency communication software enables leadership to deliver real-time information to employees across multiple channels and devices at one time. You can also use the system to check in with employees for status updates and to provide evacuation details. No matter where employees are located and what devices they’re using, you can help them stay safe and informed.
In order to optimize your emergency notification system, you should regularly update your company directory with accurate contact information for each employee. Pre-set templates help administrators prepare in advance and relay information quickly with only a few clicks. This saves precious time from having to create a new message from scratch. Templates should include email, voicemail scripts, SMS texts, and push notifications. Click here to access our free hurricane templates.
End of Part 2
https://www.alertmedia.com/blog/hurricane-preparedness-for-businesses/
*****************************************************************************************
How You Can Prepare Your Business For Hurricane Season
Part 1
By Mike Steele, CEO, Vertex Transport
July 10, 2019
Hurricane Season is upon us again! And being prepared for it as a business is more important than ever. Not just if you’re located in typical hurricane zones, but also if you do business with others in those zones.
Borrowing from the Federal Emergency Management Agency (FEMA), there are three categories of preparedness you need to focus on. In this blog post, we’ll go over the first one.
“ASSESS WHAT MATTERS MOST
Where does a company even begin when facing potentially profound damage to business continuity? It’s a daunting task to take on in the face of organizational disruptions that could result in danger to your staff and considerable financial loss.
The best place to start: look closely at what keeps your business up and running and what factors are relevant in dealing with a hurricane. Chances are it’s your people, your assets, and your location.
Take action early to protect these key elements, maintain order, and rebound quickly after a storm passes through.
Protect Your People
A company is only as strong as the people it employees. And just as you look to your workforce to handle specific business functions, they look to you for leadership and guidance.
This need is never more pronounced than when your business is facing a potential crisis. Your employees often turn to management to help keep them safe, connected, and informed in the event of a disaster.
With today’s highly mobile workforce, safeguarding your employees is no easy task. In order to protect your people, you need to take several factors into consideration:
Where is each employee located—not just in a directory, but in real time?
Which employees travel and what is their current schedule?
Do you have remote or lone workers? If so, where are they at any given moment?
Do you have a mass notification system in place to quickly and easily notify your people?
Is each employee being tracked by HR, travel, and/or building badge systems so they can be reached immediately?
Inventory Your Assets
Networks, data, equipment, technology, supplies, products, and facilities are just a few of the assets at risk during a hurricane. Threats include not only flooding and high winds, but gas shortages and power outages.
The Federal Emergency Management Agency (FEMA) recommends a Continuity Resource Toolkit, which can help businesses “prepare for and adapt to changing conditions and recover rapidly from operational disruptions.”
Identify the following assets now to prevent stress and headaches later:
Where are your assets located?
What kind of physical protection is available for each asset?
Which assets are critical to running the business?
Are these assets owned or insured?
What assets are leased and what is your responsibility if they are damaged?
Fortify Your Locations
Weather-related events are often at the mercy of their specific geographic location. Flooding can occur at a single building or at all of an organization’s facilities along the coast. You’ll need to consider how you’re going to reinforce each location.
Even facilities located far inland are still vulnerable to major damage. A hurricane might weaken to a tropical storm, but a slow-moving system can stall over a heavily populated area and cause catastrophic flooding.
Questions To Ask
What is the address of every location under your company umbrella including storage facilities and transportation lots?
What is the evacuation plan for each facility? For example: entrances/exits; stairs, elevators and escalators; parking lots; and access to the closest hurricane evacuation route.
Which people/teams work at each location?
What are the biggest risks for each facility and how fortified are they to withstand potential damage?
What types of materials are in place necessary to get a facility up and running again?”
End Part 1
https://www.alertmedia.com/blog/hurricane-preparedness-for-businesses/
***********************************************************************************
Why The Freight Broker Bond Is Important
By Mike Steele, CEO, Vertex Transport
May 22, 2019
All freight brokers in the United States must be licensed and bonded. The licensing process is managed by the Federal Motor Carrier Safety Administration (or FMCSA). Brokers must apply for their operating authority through the FMCSA, making this the only way they can operating legally in our country.
The requirements for obtaining and keeping the freight broker license is not incidental. They must be trustworthy in order to keep the license, thus their financial and professional stability is continually under scrutiny.
To become licensed, the freight broker must also carry a surety bond. Brokers today must have a $75.000 bond to obtain their operating authority (up from just $10,000 a few years ago). The bond acts as an additional layer of protection for brokers’ carriers and shippers. It is designed to help prevent fraudulent activities on the part of brokers. Shippers and carriers who feel they have been wronged by a broker can appeal for compensation by filing a claim on the broker’s bond. These parties can get a payment of up to the sum of the bond, if proven to be true. The bond has become a huge instrument in ensuring that shippers and carriers will not be unfairly treated by brokers. It quickly weeds out the more undesirable players in the field, thus giving the shipper or carrier a greater sense of confidence.
Before you start working with a broker, check the validity of their surety bond on the FMCSA’s website, https://www.fmcsa.dot.gov/.
******************************************************************************
Looking Beyond The Base Rate
By Mike Steele, CEO, Vertex Transport
April 22, 2019
You’ve just gotten a freight rate from your broker or carrier. It appears to be attractive. But what else is involved?
The base rate usually considers mileage for the lane you’ve been quoted on. And it probably also considers the commodity type or freight class and the weight of the shipment
But what about fuel surcharges? Did they give you an “all in” rate or will a surcharge be applicable that is above and beyond the base rate?
And what about accessorial charges? If any of these situations apply to your shipment, check to be sure what is covered, what isn’t and how much. These are the 10 most commonly applicable surcharges:
- Driver Load/Unload
- Reconsignment
- Sort and Segregate Service
- Driver Layover
- Lumper
- Truck Order Not Used (TONU)
- Re-Delivery
- Storage
- Deadhead
- Stop Off Charges
So, as you can see, there is a lot more to the rate quote than simply getting a base rate.
*********************************************************************
What To Expect In 2019
By Mike Steele, CEO, Vertex Transport
March 8, 2019
One of the advantages of being in third-party logistics is that you get to speak with a large number of shippers and carriers. And to listen about their concerns and problems in either getting their freight moved or having the resources to get it done. I’m no exception and have conversed with many on both sides of the fence in the first few weeks of 2019. Here’s a snapshot as to what I’m hearing from many of them:
- Capacity will continue to be tight in 2019 and 2020, as available freight will exceed available capacity. The need for more trucks – and the drivers to fill those seats – will continue to be an issue for some time to come.
- Freight rates will continue to increase as the cost of trucking will be more expensive to acquire, with higher driver pay to lure more into the industry, and as fuel prices creep up. General inflation is a factor, but mostly a minor one.
- Regulation of trucking services is at the forefront of many discussions as the trucking industry still wrestles with ELD compliance with smaller carriers and as shippers and providers alike wonder what additional changes will come in the next year.
- Infrastructure improvements aren’t coming through as quickly as they need to be. Delivery times are often extended because of traffic backlogs and rerouting. Older and crumbling roads continue to frustrate carriers as maintenance costs rise to cover more wear-and-tear.
These seem to be the top categories shippers and carriers are concerned about. What tops your lists of concerns for the remainder of 2019? Give me some feedback at This email address is being protected from spambots. You need JavaScript enabled to view it. and we’ll revisit this in a few weeks.
********************************************************************
Government Shutdown May Impact Economic Growth – But Will Trucking Follow?
By Mike Steele, CEO, Vertex Transport
January 24, 2019
According to Bloomberg News, White House officials have said that if the partial government shutdown extends through March, there’s a chance we’ll see no economic expansion this quarter (although they also said it could be followed by a growth spurt of 4 to 5 percent once federal agencies reopen).
Further, analysts surveyed by Bloomberg last week said that if the shutdown lasts through the end of March, it would deduct 0.8 percentage points from first quarter growth, which would end up at 1.5%. Conversely, estimates for GDP on an annualized pace would range from a contraction of 2% to a growth of 3.3%. This might sound small, but it’s not.
All the turmoil in Washington is likely to cause further chaos in trucking, which continues to see a capacity shortage as we come off the best year for freight tonnage in the past 20 (Transport Topics, 1/23/19). Temporarily, capacity could improve if freight movements are impacted by vendors who would normally be shipping government freight. Or serve government installations. That could bring temporary relief to the spot market. But, if demand peaks again after the debates in Washington are resolved, we could see further capacity issues in the weeks to come.
Hold on. The crazy ride continues!
******************************************************************************
Transportation & Supply Chain Predictions For 2019
By Mike Steele, CEO of Vertex Transport
December 18, 2019
This past week, we saw some predictions for transportation and the supply chain for next year. The source is www.supplychain247.com. We thought we’d share them with you and add our thoughts, as well.
- Big changes - and a more holistic, organization-wide approach - to global supply chain strategies. We couldn’t agree more. Tariff wars and related uncertainty will require top-level managers to rely more on their supply chain professionals and trade compliance people to rethink and change supply chain strategy and operations.
- A more intense focus on data analytics in supply chains. Data is key in managing the flow of information, so the need for more data and its analysis will be critical in the coming year.
- China’s expanding global reach and economic power. Don’t underestimate the influence of China on the global economy. We must resolve the current trade issues between our two countries in such a manner that BOTH sides are benefitted.
- “King Consumer” and ever-faster delivery of e-commerce orders. Amazon has raised the bar in almost every area of buying and shipping goods. Consumers want it now, not tomorrow. Transport providers have to be more in sync with this mindset to be long-time partners to retailers and other sellers.
- Intensified technological disruption and innovation. Whenever technology is part of the solution, the opportunity for failure at some point exists. We have to better “foolproof” our technology in transportation so they we don’t become the weak link in the supply chain.
- Battered U.S. transportation infrastructure. The state of our highway infrastructure and bridges is getting worse, not better, every day. We must continue to lobby our legislators for more investment of roads and highways. Next to technology and the driver shortage, this is our biggest challenge to overcome.
- Continued trucking/transportation regulation impacts. Brokers like Vertex rely on smaller truck fleets to move customer goods. Smaller fleets without ELDs are reporting reductions in miles traveled per day up to 15 percent. This inefficiency will impact shippers’ planning and their supply chains, so we must make this is as “friendly” as possible to the smaller truckers.
- The ongoing capacity crunch with drivers/trucks. As a broker, we feel it every day and it’s not going away. We must figure ways to entice younger men and women to want to get into the industry, and it cant just be about money.
- Soaring truck rates. Unfortunately, a continuing bi-product of supply and demand will continue as long as freight volumes are high and drivers are few. Best solution is to try sticking with the same brokers and carriers with the goal of getting the best rates.
- Trucking industry technology trends. New technologies and apps will continue to make our lives better and easier. On-demand load-matching freight apps will be favored by carriers and shippers. And watch for more driverless trucks. It’s coming, but at a slower pace than all the pundits are saying.
*****************************************************************************
A Season For Thanks
By Mike Steele, CEO of Vertex Transport
November 20, 2018
Thanksgiving is once again upon us – and an opportunity to reflect on the past year and give thanks.
For shippers, we can give thanks for a good economy that encourages customers to buy our goods and services.
For truckers, we can give thanks for an ample supply of freight, rising freight rates and, as of this date, declining fuel prices.
For freight brokers, we can give thanks for a marketplace that allow us to provide services to shippers and keep our carriers trucks moving with good paying freight.
We can only hope that the new year, which is just weeks away, will afford us many of the same benefits as the current year has.
So, if you are a shipper, a trucker or a freight broker, please stop and give thanks for your business. But more importantly, reflect on what you have in your own personal lives that you can be thankful for and hope that others can be as equally blessed.
*******************************************************************
Surviving The Strong Freight Market
By Mike Steele, CEO of Vertex Transport
October 26, 2018
Just this week, the American Trucking Associations reported that the year-long surge in freight volume continues into the Fall of 2018.
For the month of September, tonnage is running about 3% ahead of last year. On a year-to-date basis, its 7% ahead of last year. And we’re in the middle of the traditionally busy shipping season, where even more growth may be experienced as the retailers are expected to have one of the best holidays seasons ever.
What all this means to the average shipper is that truck capacity will continue to be restrained. Trucks will be competing for the highest rates possible, even across lanes that are usually considered back-haul. So, as a shipper, how do you survive this strong freight market?
Simply put, keep your options open and have as many shipping alternatives available to you as possible. Use intermodal instead of truck where you can. Instead of LTL, try to build loads into a full truck with multiple stops along the way. Rely on the spot market when your regular carriers seem too busy with volume shipper freight. And establish relationships with truck brokers. They have far more connections with carriers than many shippers do, and have the expertise to find a truck quicker than you may be able to do.
You can survive this tight freight market if you plan accordingly and work smarter, not harder.
***************************************************************************************
Smack In The Middle
By Mike Steele, CEO, Vertex Transport
September 24, 2018
As the title of this suggests, we’re smack in the middle….of the annual busy season for shipping. Historically, the busiest time of year to ship goods is from Labor Day until Thanksgiving. That’s because brick & mortar retailers are busy stocking their stores for shoppers and online retailers are building inventory for the (anticipated) busy Christmas buying season. Technology-based products are again expected to be the biggest sellers.
So what does these mean for shippers? Simply put, EVERTHING. Since the economy rebounded after the Great Recession, truck capacity has gotten tighter and tighter and tighter still. And increased movement of product in the 4th quarter will do nothing more than tax already strained truck capacity.
So what can you do so you don’t get caught with product and no trucks?
- Reaffirm your relationships with carriers and brokers and establish new ones where possible
- Allow additional shipping time to get stuff from Points A & B; don’t wait until the 11th hour
- Expect to pay higher prices for truck services, including adjustments for higher fuel prices
- Stay diligent in your search for capacity as you may have to work longer and harder
- Where possible, ship product head-haul into what are usually back-haul lanes (better rates, more trucks)
The holidays will be here before we know it – Thanksgiving, Christmas, New Year’s. Shippers will be rushing to complete their last orders and get everything in or out before holiday closures. The year is coming to an end as well, and no one wants to leave freight behind and drag it into the new year.
*******************************************************************************************
How to Determine Whether Your Freight Broker Is Legitimate
By Mike Steele, CEO, Vertex Transport
August 24, 2018
Before you do business with your next freight broker, we suggest you check them out from stem to stern. The industry is highly fragmented and there are both good providers and not-so-good providers out there.
Why Use A Freight Broker?
A good broker knows the shipping industry, uses the latest technology and works with reliable carriers that can sometimes be hard to find.
The right freight broker can find the best shipping options for you and save you time and money.
The right freight broker will know current regulations and the paperwork required.
The right freight broker can handle virtually any problem that may arise.
So if you think you’ve found a broker that fits these parameters…
Check The Broker’s Credentials
Freight brokers must be licensed and bonded. They are all regulated by the Federal Motor Carrier Safety Administration (FMCSA).
Check with FMCSA to see if their license is current. Also, determine if it has ever been revoked and then re-instated.
Get a copy of their FMCSA operating authority.
Get a copy of their insurance certificates and be sure everything is current. Contact the insurance company that issued the certificate if something doesn’t smell right.
Get a copy of their surety bond, which is their assurance to carriers that the carriers will get paid. Be sure the bond is for at least $75,000.
Document your efforts so you won’t have to reinvent the wheel again later.
Doing your homework to verify broker legitimacy is the best thing you can do to prevent future problems.
**********************************************************************
Factors To Consider In Choosing The Best 3PL Provider
By Mike Steele, CEO, Vertex Transport
July 23, 2018
With the new year fast upon us, you may be thinking about adding or consolidating third-party logistics providers. If that’s the case, there are several factors to consider besides just who offers the best price. In no particular order, some of them are:
· Consolidating loads to increase shipping volume – this decreases your overall cost because you can offer more freight to carriers over like lanes
· Making sure the rates you get are all-inclusive – don’t get just long-haul rates, be sure to get all the accessorials worked out as well
· Including high and low-demand periods of the year in your budget – don’t assume each month is the same; rates may decline in the winter and summer, but increase in the spring and fall
· Opening up two-way lines of communication with your service providers – it won’t work effectively if one or the other side thinks its simply a one-way road
*************************************************************************
Shipping Is The Broker’s Core Competency
By Mike Steele, CEO, Vertex Transport
June 20, 2018
Shippers are focused on a varied of activities. Securing raw materials. Turning raw materials into finished goods. Finding channels to market their products. Marketing and advertising their wares. And the list goes on. In most cases, moving goods is not the primary focus of shippers. But it is the main focus or core competency for brokers.
Shipping is the only thing brokers do – and – as such are likely better qualified to do it than the shippers themselves. Identifying optimal routes and modes of transportation. Locating and securing carriers. Vetting those carriers for equipment, safety and reliability. Negotiating rates. Scheduling pickups and deliveries. Billing the carriers. Filing claims with carriers in the occasional event something goes awry.
That is what the broker does. Day in, day out. Everyday. 365 days a year. Often thousands of times a year.
So when it comes time to re-evaluate your shipping program, consider adding brokers to the mix. It’s what they do, the only thing they do, and they do it well.
******************************************************************************
Brokers Have A Carrier Vetting Process That Includes Authority, Insurance Verification and Safety Rating
By Mike Steele, CEO, Vertex Transport
May 20, 2018
This is one of the areas where a good broker really excels. This a critical place where they can add value and justify their margins.
There are literally hundreds of thousands of carriers out there moving freight, but many of them have no business doing so. Some have expired operating authority, minimal or non-existing insurance or a safety rating that is one-step away from being shut-down. Finding a carrier where any of these situations exist is an unnecessary risk to you and your freight.
Brokers continually scrutinize operating authority not only for expired authority, but also for new authority. If no track record exists to determine whether the carrier should be entrusted with any freight, then why take the chance. A low MC (motor carrier) or DOT (Department of Transportation) number indicates that the carrier and its authority have been around for many years. That suggests stabilty. On the other hand, a high MC or DOT number points to a newer carrier and many brokers with not tender freight to carriers with a number less than six months old.
Insurance is another area where ongoing scrutiny is needed through the various tools and websites that track carrier insurance protection. You don't want to hire a carrier with expired or insuffient insurance and your broker will steer you clear of these. Insuffient insurance applies to higher value loads. You don't want to move a load worth $500,000 with a carrier that only has $250,000 of coverage.
Safety is something that has been a top priority in the trucking industry the past several years. Solid, well financed carriers will have a good or adequate safety rating, while others will not. You don't want your freight to be on a truck operated a carrier that is literally being followed by the FMCSA just waiting for the next infraction to shut them down.
So trust your broker to represent you well in there areas.
****************************************************************
Brokers Have The Know-How To Steer Clear Of Under-Insured, Inexperienced Carriers
By Mike Steele, CEO, Vertex Transport
April 20, 2018
One of the most important decision points in moving your freight is deciding which carriers you will use to move your move. You can try to do this yourself, but freight brokers like Vertex Transport are often better equipped to do the job.
Brokers have access to the tools needed to vet carriers for quality and safety and do it all the time as a course of business. They will also have built their own database of carriers over the years and already know which carriers are better to do business with – and the ones you want to steer clear of.
Why would you entrust an expensive truckload of freight with a carrier you don’t know anything about? While many carriers have good reputations with good safety records, the proper due diligence is needed before consigning freight to a trucker.
Performing the appropriate due diligence on freight carriers is a tedious, but necessary task. Just two of the tools that brokers use to do this vetting include:
Carrier 411 is a paid carrier monitoring service. Its universe contains nearly one million carriers that are registered with the Federal Motor Carrier Safety Administration (FMSCA). This service is used to confirm identities and to run equipment VINs and license plates to make sure nothing negative jumps out. The service also identifies carriers with a history of unethical behavior and companies that operate under multiple names or MC numbers to hide their true identity.
DAT Carrier Watch is another paid service brokers use to collect and verify carrier insurance levels. It has a link to the Transportation Intermediaries Association’s (TIA) Watchdog report that displays TIA member reports about carriers.
The Department of Transportation (DOT) inspects carriers regularly and rates them for safety. DOT ratings are typically satisfactory, unsatisfactory or conditional. The carrier usually has time to improve a conditional rating. Good brokers stick with those carriers with satisfactory or improving safety rating.
Another thing to consider is not using a carrier whose operating authority is less than six months old. That is not a long enough a period of time for a sufficient service history to have been established.
**********************************
Brokers Have The Shipping Volume Leverage Needed To Negotiate Better Rates
By Mike Steele, CEO, Vertex Transport LLC
March 20, 2018
Most small to medium sized shippers have less freight volumes to tender to carriers than brokers do. That's why brokers have greater buying power than most shippers do.
This doesn't apply just to freight volumes in general, but over specific traffic lanes as well. Carriers who specialize in runs to specific markets position their equipment in these markets and are always looking for freight to keep their trucks full. Empty trucks equals empty miles, thus higher costs for carriers as driver still need to be paid and fuel still needs to be purchased.
Carriers also have differing long haul and back haul characteristics. One carrier's headhaul lane is another carrier's backhaul. Brokers can provide carriers with more backhaul freight, which means more freight can also be moved at backhaul rather than headhaul rates.
Think of working with a broker as working with a co-op. With a broker, your freight is essential pooled with the freight of other shippers to be tendered to carriers. This implies greater volume, and thus a load that might normally cost $1000 to be moved might cost $950 or even $900 because you have more than one load to tender to a carrier.
Brokers deal largely in the spot market where freight and pricing velocity is more uncertain. Brokers can use their buying power with carriers to normalize the flow of freight across certain lanes, thus helping take uncertainty out of pricing. For example, on lanes where prices range from $2.50 to $3.50 per mile depending on time of year and even the day of the week, stablilzing the movement of freight might shave the price range by 50 cents a mile. Over the course of hundreds of miles and thousands of loads that can add up to tremendous savings.
**********************************
Brokers Manage Risk, Providing a Layer of Protection Between You and the Carriers
By Mike Steele, CEO, Vertex Transport LLC
February 20, 2018
Working with brokers to secure transportation for your freight comes with a multiple of benefits, including providing a layer of protection between your company and the carriers selected to move the goods. Insurance is a huge piece of this.
All brokers are required to carry a surety bond of $75,000, which provides a pool of money that carriers can collect against if the broker fails to pay their bills. This provides a plus to you by working through that broker because the carrier is assured of getting paid.
Carriers are legally responsible for the safe handling and delivered condition of freight they transport. To insure against most negatives, motor carriers typically carry a form of primary trucker's cargo liability insurance.
Where the broker provides extra protection is by carrying Contingent Cargo Insurance, which acts as a back-up to the coverage provided under the motor carrier's insurance. The default insurance limit for cargo policies is $100,000, so higher-value shipments must be placed with more financially secure motor carriers with higher limits, say up to $250,000. If the broker is involved, the contingent cargo policy should follow suit.
Highway transport of freight has the constant risk of huge accidents resulting in serious personal injuries and property losses. Federal motor carrier safety regulations mandate minimum auto liability insurance limits of at least $750,000.
However, neither limit is sufficient to cover the possible range of losses when there is significant property damage and/or loss of life. Motor carriers that proactively manage risk can be expected to have $2 million or more of coverage, but recent jury verdicts have reached 10 times that amount.
Continuing litigation has identified possible exposure for brokers, too. Some jurisdictions allow a cause of action against the broker for negligence in hiring or selecting the motor carrier that causes injury. The insurance market has responded with a type of insurance that covers this risk: primary truck brokers liability insurance. It covers a broker's use of hired trucks to move brokered freight, the core activity in which brokers are engaged.
Utilizing a skilled broker that incorporates risk mitigation in the selection process reduces the risk to parties further removed from the transportation cycle. For shippers concerned about managing risk, they should choose a broker with the best financial responsibility and insurance. Parties that work together with a common approach to safety can achieve greater success than those that do not.
**********************************
Brokers Have the Resources to Develop and Maintain Relationships With Large Numbers of Carriers
By Mike Steele, CEO, Vertex Transport LLC
January 20, 2018
One of the main reasons for outsourcing your transportation management activities is the huge window it opens to providing access to a greater range of carriers.
By using a broker to manage your transportation, instead of having access to dozens or maybe hundreds of carriers, you will have access to literally thousands of carriers. And that means having access to tens of thousands of pieces of rolling stock.
This is particularly important if your needs include specialized equipment such as reefers or flatbeds. This type of equipment is always in high demand, making it more difficult to find if your carrier base is small.
By having access to more trucks, it lessens the likelihood of having to pay to have that truck repositioned in a different market to pick up your freight. This saves you money and helps reduce the overall transit time for your load from Point A to Point B.
And don't forget that brokers are more experienced at vetting carriers for you. So you are more likely to have a truck on your load that has a better reputation, better safety record and the proper insurance. For more information about that benefit, see our previous post below.
**********************************
Brokers Have Access To a Wide Range of Equipment and Modal Types
By Mike Steele, CEO, Vertex Transport LLC
December 20, 2017
As a continuation of our series on the top reasons for using a freight broker, we'll address access to capacity. Unlike asset-based carriers, brokers are not limited to the capacity like truckers are. Carriers can only provide capacity for the number of trucks and drivers in their operation. A broker will have agreements and contracts in place with literally thousands of reputable carriers, thus the carriers' collective capacity becomes that of the broker. And not only is the number of trucks available increased through use of a broker, so does the mix of equipment types. For example, a truckload carrier that deals exclusively in dry vans will not be able to handle freight that requires refrigeration or open bed. They will be limited to handling dry cargo that fills a 48' or 53' trailer.
And it goes deeper than this. Multi-modes are also now at the disposal of the shipper. Less-than-truckoad and intermodal options now become available, as do non-highway modes such as air or ocean. So if finding a truck in a critical lane becomes particularly difficult, the railroads now offer truck-like services in most markets. All under the direction of your broker.
So when deciding on which carrier to use, you may want to be less limiting in your choices and select a broker instead. You'll find that the landscape becomes less constrained when you do.
*********************************
Freight Brokers Are Licensed and Bonded Intermediaries
By Mike Steele, CEO, Vertex Transport LLC
November 20, 2017
Recently, we started a blog on the top reasons for using a freight broker. We broke these reasons into eight categories. Let's take a few moments to elaborate on the first one: freight brokers are licensed and bonded intermediaries.
Everyone business man or woman who runs a freight brokerage firm must be licensed and bonded. These are federal government requirements designed to protect not only the shipper, but also the carrier.
A freight broker must have operating authority issued by the Federal Motor Carrier Safety Administration (FMCSA). These are often referred to as motor carrier numbers. The lower the number, the longer the authority has existed. For example, an MC# of 333444 would indicate a broker that's been around for several years. An MC # of 888999 indicates an authority that may only be several months old. The age of the authority doesn't necessarily imply stability, but the longer the authority has existed the more likely a shipper or carrier may want to do business with that broker.
The freight broker must also be bonded and carry a Surety Bond of at least $75,000. This is the minimum amount having been increased from $10,000 in 2013. This bond exists to protect the carrier. It exists to provide a fund to be paid to carriers in the event the broker becomes insolvent and not paying its carriers. Alert carriers will always want to check out the bond the broker has before moving their first load from them.
If you are approached by someone alledging to be a freight broker, but can't provide active and valid operating authority and a surety bond, DON'T do business with them. It could be a scam, or at least it could be an opportunity to lose your freight.
*********************************
Top Reasons for Using A Freight Broker
By Mike Steele, CEO, Vertex Transport LLC
October 20, 2017
Freight brokers play a huge and important role in the logistics supply chain. They support manufacturers, retailers, wholesalers and government entities in the movement of freight between Points A & B. They perform services for these types of shippers that these companies would need to have the expertise and resources to otherwise do on their – often at a higher cost in time and money.
In the next several installments in this blog, we will explore the following top reasons why your company should consider using a freight broker, if you are not already:
- Brokers are licensed and bonded intermediaries
- Brokers have access to a wide range of equipment and modal types
- Brokers manage risk, providing a layer of protection between you and the carriers (including insurance)
- Brokers have the resources to develop and maintain relationships with large numbers of carriers
- Brokers have the shipping volume leverage needed to negotiate better rates
- Brokers have the know-how to steer clear of under-insured, inexperienced carriers
- Brokers have a carrier vetting process that includes authority and insurance verification and safety rating
- Shipping is the broker’s core competency
Until next time…………..
