Recently, JBF's Executive Principal of Strategy and Innovation, Mike Mulqueen, joined industry experts, Adrian Gonzalez, Founder of Talking Logistics and President of Adelante SCM, Jason Miller, Professor at Michigan State University, Eric Johnson, Sales Director at Transporeon, and Strategic Supply Chain Software Advisor, David Landau, for a live roundtable discussion to discuss freight challenges in North America. Mike shared some expert insights, which you can read below.
Are shippers/carriers optimistic or pessimistic about the road ahead?
It’s two sides of the coin. From a shipper’s perspective things are going great, especially on the truckload side—rates are down and essentially no tenders are getting rejected.
But, shippers also understand the cyclical nature of freight transportation. In the last few years, the amplitude and frequency of market changes have been dramatic. Consequently, shippers are preparing for the inevitable switch of the market, but we don’t expect changes within the next 3-6 months.
All in all, it’s not a bad time to be a shipper right now. However, from a carrier’s perspective, it's a much harder time and a different conversation.
Are shippers and carriers taking a longer-term, more continuous partnership perspective in the way they work with each other?
In short, no. The adversarial relationship between shippers and carriers that we have historically seen is still very much present.
As capacity dried up in 2021-2022, we saw rates go through the roof and contract carriers decline 30-40% of loads that were under contract. Ultimately, that soured a lot of relationships, and we are still seeing the damage today.
While you don’t need to have a tight relationship with all of your carriers, there is great value in having a relationship with your core carriers.
There is a regulatory push for shippers to transition from diesel vehicles to battery electric vehicles (BEVs) as well as to measure and report their carbon emissions. What challenges and opportunities does this present to shippers and carriers?
JBF does evaluations for shippers, and a requirement that's popped up over the last 2-3 years is the ability to accurately report Scope 1, 2, and 3 emissions from within a TMS. Over the next few years, organizations, both large and small, are going to need to be able to report all of their emissions, so we're now seeing calculators built into the logistics tech. Ultimately, CO2 emissions are now intrinsic to the shipment itself.
As for BEVs, the governmental mandates are ahead of the tech. Between the U.S. electrical grid, an overall lack of infrastructure, and high BEV costs, the initiatives at the federal and state levels raise concerns.
Does the fact that environmental impact is involved in routing guide decisions and procurement processes impact the carriers that are selected for certain lanes?
Historically, a logistics system's purpose was to minimize cost. Now, it's cost minimization plus emissions, meaning even though a carrier may be a little bit more expensive, being SmartWay certified and showing reduced emissions often gives them the upper hand.
BEVs also add another level of complexity to route optimization. Things such as terrain and temperature need to be taken into account that in the diesel world are irrelevant, but in this new world, they're critical.
How is technology transforming transportation procurement?
Technology has allowed companies to have access to information that they would not have had in the past. Shippers often don't have a competency or an understanding of the dynamics of a freight market, so access to benchmark rates has been a game-changer by allowing shippers to understand where their opportunities are.
How is AI being used to improve transportation operations?
While AI can be overhyped, it also has the potential to be extremely valuable. Right now, most AI use cases are incremental—they’re designed to help end users with existing processes as opposed to completely transforming logistics operations. Virtual assistants are a prime example of this.
In the future, AI could very well take over all or a subset of a process, but there aren’t any technology providers who are there yet. We are hopeful that within the next decade, they will be.
You can hear all the great insights these industry experts had to offer by viewing the entire conversation here.
About the Author
Mike Mulqueen is the Executive Principal of Strategy & Innovation at JBF Consulting. Mike is a leading expert in logistics solutions with over 30 years managing, designing and implementing freight transport technology. His functional expertise is in Multi-modal Transportation Management, Supply Chain Visibility, and Transportation Modeling. Mike earned his master’s degree in engineering and logistics from MIT and BS in business and marketing from University of Maryland.
About JBF Consulting
Since 2003, we’ve been helping shippers of all sizes and across many industries select, implement and squeeze as much value as possible out of their logistics systems. We speak your language — not consultant-speak – and we get to know you. Our leadership team has over 100 years of logistics and TMS implementation experience. Because we operate in a niche — we’re not all things to all people — our team members have a very specialized skill set: logistics operations experience + transportation technology + communication and problem-solving skills + a bunch of other cool stuff.
