Summary
No signs of hope for carriers as demand continues to fall. Carriers are shedding assets due to weak demand. Shippers are beginning to worry about future capacity. Freight Brokers may not be able to source enough capacity to meet shipper demand. Will non asset brokers be willing to assist carriers in sourcing the equipment needed to meet demand?
Analysis
Dave Hannon, in an article published on purchasing.com, correctly identifies what will become a major issue for shippers once the economy begins to recover. Mr. Hannon states that as asset based carriers shed equipment, non asset brokers will have a much harder time sourcing capacity, and that It is conceivable that brokers may have to help struggling capacity providers with equipment acquisition and financing in order to source adequate capacity.
This is an interesting concept. Would large 3PLs such as CH Robinson be willing to take a cash position with the carriers they tender freight to? Will upward rate pressure and the return to profitability by motor carriers be enough to free up financing to allow equipment acquisitions?
Either way, tomorrows shippers who today are enjoying the lowest rates in a decade, will be facing a much more challenging rate environment in the near future.
