By Cain Adams
Trinity Logistics/Longboard Logistics
Meridian, ID
Is there going to be enough water next year for crops grown in the Western states? Knowing other crops take less water to grow, will farmers plant as many onions? Will the freight rates come down next year?
These three questions came up this week while talking to shippers. Another question I asked was, “In one small thought, how has 2021 changed your business?”
Answers:
“I snore when I sleep and think it’s the 15 pounds added.”
“It’s changed everything.”
“The weather.”
“Forced us to rethink carrier development strategies and reengineer sales processes based on the freight market.”
“We got throttled down on both onion and truck capacity. There was no ‘extra’ business to be had. We had to prioritize customers and remove the tire kickers and price matchers.”
“I would say transportation costs have customers looking to other areas for onions. When you couple the high onion prices compared to years past and the high freight rates compared to years past, it has people rethinking what area of the country they are sourcing their onion needs from. And you can’t lay all the blame at the feet of the carriers as the trucking industry is like anything else out there. Supply and demand. So that is what I see being a hurdle this season compared to years in the past.”
Most drivers and transportation managers do not look at how much water a region will be given. Freight managers look at how much volume of freight is in a region and the possibility of locking in a contract or finding spot market freight. The transportation company looks at credit of a customer not their farming practices. Data is more important and its usually based on prior years of operations. So, what will happen in 2022 when freight managers look at 2021 as a benchmark year?
We have no idea what will happen in 2022, but we can see much change in 2021. And change is good.
Change and chaos shift profits from one place to another. Change may feel like a wild river, but change also creates different paths just as a wild river does in nature. We have seen technology grow this past year in tracking, automated lumper service apps, scheduling and safe practices on docks.
Moreover, with the lack of drivers, increased fuel costs and increased freight rates we saw leaps of success in automated and electric trucking companies. Instead of money being invested further into the oil industry, it’s landing on the desks of the Teslas of the world.
These changes trickle down and help other industries while leaving some behind. Drivers are covering their overhead and staying home more. Shippers, shoppers and receivers are all trying to be more efficient.
More shippers are asking carriers to set loading appointments, shoppers are doing home delivery and curb side pickup, receivers like Walmart are leasing their own staging areas at ports. It is all changing.
Farming too may see changes in the future, due to higher shipping costs, labor hardships and uncertainty. More land may be put up for sale to build a subdivision, school or park. Rates may get to a point where farmers call it quits. Conglomerations would happen, and those still in business may see higher profit margins with less competition in the marketplace.
The loser may be the consumer who pays higher prices unless efficiencies are worked on. The loser may be tractor companies who don’t have as many farms to sell equipment to. But, the tractor companies may be able to create different business formats such as leases or rental stations. We have no idea what the future holds, but we cannot always look at change and think it is a bad thing. We cannot look at higher prices and think, “Oh no.”
“Everything has changed.” This to me, is the most thought-provoking statement. It’s a wide-open statement and makes us think of what may come and what we can change in ourselves.
Americans are resilient in nature. In my opinion, we seem to handle things a bit different than any other country. Some Americans may wear skinny jeans and color our hair, but that too is showing we are not afraid of change. We seem to navigate the changing rivers and finding opportunity in each new bend. This is why I am hopeful and excited to see 2022 come.
Renaissance?
2022 will be a pivotal year like 2021. The strong will survive change because the strong will acknowledge, reflect, plan and execute. Those who do not make changes may see it as a hard year.
Inflation, interest rates, labor, fuel prices, driver availability, freight mix. These words should be remembered as we go into the new year. Be aware and make 2022 a pivotal year for your business. Change is here.
Now what? What will you do each day to make your business amazing? Happy 2022. I hope each of you is successful in your own way. Cheers, Cain Adams
