At the CSCMP conference, I heard a lot about the need for good relationships with carriers. Given that more than 50% of the for-hire trucks are in fleets of less than 20 trucks, having a relationship is impractical. (It is like one girl wanting to date everybody in the Marine Corps). My thesis is that:
- Most transportation contracts are too vague to be the foundation of a relationship
- Carriers have a responsibility to their employees and shareholders to maximize profit and thus should not run at below-market pricing without long-term guarantees
- Shippers have a responsibility to their shareholders to pay the least possible rate to provide the level of service needed
- All this creates conflict
- We will be better served to treat transportation as a commodity
Oil is hovering around $75…oil at $100? Lots of traders are betting on this. Hang on for the ride!