Low rates and high costs are not exactly a recipe for success for carriers. The oversupplied transportation market has created major headwinds for carriers, as many have treaded water while waiting for the market to rebalance. While signs point to a market-flip in 2025, it’s been slow-going. Carriers that prioritized cost controls and relationships are poised to take advantage.
This is an excerpt from our annual report, “Freight Focus.” Read it in full in full here.
The extremely difficult business climate has led to many small to midsize carriers either downsizing or exiting. But the sheer number of new carriers who entered the market when COVID-19 pushed rates skyward led to a massive supply and demand balance once the disruptions eased and demand leveled off.
When will the market turn?
How far away is the light at the end of this tunnel? Current DAT iQ forecasts suggests Q2 at the earliest. Major disruptions could speed up this timeline, but either way, carriers will likely still be operating under austerity measures for a few more months at least.
Investing in the long haul
There are proactive steps that carriers can take to better position themselves when the market recovers. Cost control is still the name of the game, but one investment that yields returns is in route optimization tools. These help reduce deadhead, and when combined with best practices to control fuel consumption, carriers can maximize their assets.
Now is also the time to focus on business relationships. Making deep connections with reliable partners now will pay dividends down the road. Putting extra emphasis on service is one way to put those partnerships on firm ground.
Minimize risk and maximize opportunity
Carriers looking to be in the best position to take advantage of a turn in the market of two main areas of focus: Minimize risk and maximize opportunity.
Fighting fraud
Fraud remains a significant challenge for carriers. Businesses can lower their risk profile by incorporating modern cybersecurity technologies and making sure they’re following best practices in everything from the passwords they use to making sure devices always have the latest security updates.
Employee training is also critical. Phishing attacks are routinely targeting the transportation industry, with would-be fraudsters pretending to be DAT or other legit businesses.
Strike when the iron’s hot
While we can’t know the exact timing of the next market cycle, carriers will still need to be able to respond quickly. Carriers can use tools like the Market Conditions Index on the DAT One platform to get a quick glance of where individual markets are headed.
Investing in data and analytics tools allows carriers to identify which markets are poised to flip in their favor and pinpoint where their services are most in demand.
