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
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • CSCMP EDGE 2023
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • CSCMP EDGE 2023
    • Upload Your Video
Home » Freight rate spikes shaking up the C-suite
newsworthy

Freight rate spikes shaking up the C-suite

October 3, 2018
Mark B. 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.

Transportation Trucking
    • Related Articles

      Axele Free Webinar: Best Fleets to Drive for - Trends from the C-Suite to the Driver Suite

      RILA show: Supply chain officers bring fresh approach to the C-suite

      Cargomatic Rebuilds C-Suite - New Team Designed to Spur Growth & Innovation

    Marksolomon
    Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

    Recent Articles by Mark Solomon

    Coming together for road safety: interview with Joshua Girard

    Off the rails

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

    Report Abusive Comment

    Most Popular Articles

    • Warehouse renters could see “significant” rate increases in 2024, Prologis says

    • MercuryGate acquires cross-border customs clearance specialist ITS

    • Beset by loose capacity and weak demand, where do parcel express carriers go from here?

    • DHL Supply Chain to add five more AS/RS installations from AutoStore

    • Yes, your SMB can afford AMRs

    Now Playing on DCV-TV

    86b12a2a 86fa 4a93 85e6 c5470638a478

    Want to Increase Your Profitability by 1%? Then Ask: Is Your Company’s Supply Chain an Asset or an Anchor?

    DCV-TV 4: Viewer Contributed
    When supply chains are viewed as an asset instead of an anchor, companies are more likely to invest in optimizing them because of how it can impact their financial results. There are numerous articles talking about how companies have invested in their supply chains and it yielded substantial savings – savings in...

    FEATURED WHITE PAPERS

    • Exploring Forklift Energy Solutions for Maximum ROI

    • Identifying How Sortation Automation Can Address Challenges for Parcel Processors

    • Quarterly Freight Data Report: Q3 2023

    • Achieve Higher Performance with a Voice Directed Automated Warehouse

    View More

    Subscribe to DC Velocity Magazine

    GET YOUR FREE SUBSCRIPTION
    • SUBSCRIBE
    • NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

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