Dear Valued Customers,
Subject: Market Status
We at Concept wanted to take a minute and extend our gratitude and appreciation for the business we have been doing with all of our customers. We will continue to extend our services to you as long as you have a need and are willing to let us work toward helping you realize your goals.
The last couple of weeks have been demanding in the industry and with the current status of the market, frustrating as well. There have been a couple different factors that have contributed to this. It is our hope that these updates will help explain the status of the current market and provide our valued customers a better understanding of the marketplace we are in today.
The following are what we have been seeing create problems in what has been referred to as a “perfect storm of factors”. These factors are what is driving this high cost, tight capacity, and delays in the service market that we are in at the moment.
WEATHER: This comes as no surprise. This year’s brutal winter has affected everything from the housing market and unemployment rate to petroleum markets. “We look for the pace of growth to rebound meaningfully in the coming months as the drag on activity from the unseasonably cold weather abates” — One economist’s reaction to the US’s economic whirlwind.
When delays happen due to weather (especially in cities where they are not as prepared) it can cripple the supply chain. Trucks are running late or maybe not able to deliver/pick up at all. Shippers are forced to close or not open, disrupting manufacturing schedules. Not to mention when inclement weather sets in (and stays) it can just be tough in general to get things done.
HOURS OF SERVICE: Went into place in July ’13; these new rules are not allowing the drivers to get their usual drive times which in turn is slowing down what they are able to do in the times allotted to them
FUEL: This we can all understand. The costs of fuel to get these trucks down the road are ever increasing. They, simply put, can no longer take the brunt of the costs.
ECONOMY: A flat economy had led to an alarming rate of carrier bankruptcies. That, in turn, puts it on the carriers that are surviving to go in to a “panic mode”, driving rate prices higher.
OPERATING COSTS: Things like insurance, driver pay, tolls, equipment updates and repairs, all of these costs are on the rise, and all of those costs are unfortunately necessities.
SEASON: We are coming upon produce season. We run into capacity issues on a yearly basis in certain lanes. So, to turn a phrase, it is like adding fuel to a fire at this point.
WHAT CAN HELP? :
Flexibility: What you can allow in shipping/receiving dates/times communicated up front.
Lead Time/ Transit Time: This can help us to utilize additional modes such as Intermodal & Consolidation to source equipment
Communicating: What your needs are prior to sourcing out equipment. If you do need expedited service, we will need to source the correct capacity beforehand.
Understanding: In these times, the better we all work together we feel will get what you need done more efficient and cost effective.
Thank you for your time and consideration. Concept is committed to getting you the best service and with your help; “We believe that all things are possible”