We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Freight rate spikes shaking up the C-suite
Forward Thinking

Freight rate spikes shaking up the C-suite

October 3, 2018
Mark Solomon
No Comments

It's different this time, according to several shipper executives.

The relatively sudden and violent spike in motor freight rates over the past 12 months has carved an indelible imprint in corporate psyches that has extended all the way up to the C-suite, several shipper executives said today at the Council of Supply Chain Management Professionals' (CSCMP) annual EDGE meeting in Nashville, Tennessee.

The rate surge has been so profound that, for the first time in memory, CEOs and CFOs are publicly alluding to it as a key factor in impacting their companies' quarterly results. However, rates spiked nearly as strongly in the 2003-04 period and then again for a 7-month interval in 2014. After some short-term dislocations, relations between shippers and carriers returned to business as usual, which often meant shippers using their leverage to beat down their carriers on rates.

This cycle has a different feel to it, in part because the impact has been communicated up the corporate ladder. As a result, said Jennifer Kobus, director of transportation for Ulta Beauty, a cosmetics firm. "Leadership is not going to relax on the supply chain." Another factor, Kobus said, is that carriers have access to more data and knowledge than ever before and can be far more selective than ever in choosing the shippers they work with.

In response to the changing landscape, Ulta is piloting a modest private fleet program, Kobus said. The firm is also looking at rail options, something it has shied away from in the past.

Shippers who enjoyed a rate leverage through 2016 and into a good part of 2017 were caught off-guard by the suddenness of the change that began around the fourth quarter of last year. "What struck us was the speed and velocity of how the market changed," said Brad Blizzard, executive director, logistics supply chain management for tiremaker Bridgestone Americas. Bridgestone also has a decent-sized private fleet, which Blizzard said gave him a "360-degree view" of both sides of the issue.

Michael Nasif, director of corporate transportation for plumbing fixtures firm Kohler Co., added that he was surprised by the "change in capacity that happened so quickly."

Blizzard said the freight market is undergoing a "structural" realignment that will keep rates elevated for years. He added, however, that prices should level off from the 2018 spikes. No panelist was willing to go out on a limb and forecast the price bumps for 2019.

Logistics
    • Related Articles

      Forecast 2014: A "banner year" for freight

      Global air freight remains saddled by overcapacity, IATA April data show

      Uber poised to double investment in freight unit after making it independent

    Mark Solomon is executive editor—news at DC Velocity, a sister publication of CSCMP's Supply Chain Quarterly.

    Recent Articles by Mark Solomon

    DHL unit tests program to manage returns of cross-border e-commerce

    U.S. ports want tariff exemption on purchases of Chinese-built cranes

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Report: Sagging freight stats show that trucking sector is returning to its historic mean

    • Survey: parcel delivery drivers are frustrated by using their own smartphones for work

    • Heavy transport across two continents

    • Survey: most Americans unaware that truckers face shortage of parking spaces

    • Supply chain executives not yet seeing expected results from technology investments

    Featured Video

    20221107korber large vs

    Enhancing Customer Experience with Your Supply Chain Strategy

    Viewer Contributed
    With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

    FEATURED WHITE PAPERS

    • Three layers of forklift safety: Promoting operating best practices

    • The Complete Guide to Automated Packaging

    • Five tips for parcel success in 2023

    • Guide to Pallet Rack Safety

    View More

    Subscribe to Supply Chain Quarterly

    Get Your Subscription
    • SUBSCRIBE
    • E-NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing