In our latest episode of McLeod Insights, we sat down with McLeod’s Keri Hodnett and Maurika Hobson. We discussed market trends and freight forecasting as they relate to managing seasonal freight.
Keri is the PowerBroker Product Manager at McLeod, and our Maurika is an Implementation Trainer. They bring a wealth of experience and expertise in seasonal freight management.
Planning and Forecasting Seasonal Freight
When planning and forecasting freight, it’s important to consider seasonal freight and its impact on operations. Seasonal freight is a combination of seasonality, plus industry and market trends. Some freight brokers are busier during certain seasons, while business may slow for others.
Depending on the season, the industry, and the trends, some transportation companies may experience months on end with almost no truck capacity, followed by a stretch of time with plenty.
For transportation companies whose customer base doesn’t deal in shipping produce, seasonal freight varies in different commodities. For example, depending on the demand, some transportation companies must shift from using trucks to flatbeds during certain times of year.
But the actual seasons can impact van freight versus flatbed freight. Flatbeds are more impacted by changes in the weather, such as hurricane season, flood season, and winter. Additionally, if your customer base has on-site dependent needs, the actual seasons can impact that, too.
Maurika was heavily involved in working with produce freight at her previous company. She says they were able to predict freight load arrivals down to specifics, including where specific loads were coming from, and when.
“By paying attention to the peak seasons and seasonal trends, I knew when to quote high and when to quote low, and also when and where to target specific prospects for new business,” Maurika says.
Capacity crunches tend to become an issue during busy times of year, so it’s important to have a diverse carrier base and a wide range of drivers available.
“One minute, your trucks are there and ready to go. The next, they’re going to be tied up for the next several months. So creating diversity in your carrier base will help you find people who can haul freight during those capacity crunches,” Keri says.
Preparing for Changing Seasons
Even from the start of the prospecting process, it’s important to be mindful of your customer base and what their seasonal markets are, according to Maurika. During prospecting, asking questions about the customer base up front can give you a solid idea of what their seasons might look like going forward.
“You have to account for things like their heavy season versus the rest of the year,” Keri says. “Their heavy season is a small portion of the year in comparison, and you know how to position yourself in terms of rates and which lanes you’re going to be able to offer more services on.”
Additionally, it’s important to get to know your carriers during off-peak seasons.
“On the carrier side, I like to identify good carriers and the lanes they like, then work during non-peak seasons to build rapport and relationships with them,” says Maurika. “That made it easier when I had to negotiate spot-rate with them.”
During a peak season, the market can be tight and difficult to navigate. In addition to knowing your carriers, you should also consider suggesting alternative modes of transportation when needed.
“It might be a little scary for a broker who’s traditionally well versed in shipping truckload freight to suggest rail transportation instead,” Maurika says, “but that’s invaluable advice.”
Navigating Seasonal Rate Fluctuations
When it comes to seasonal trends, brokers need to understand what the marketplace is doing at any given time. Companies need to be able to leverage their rates and associations to account for the impact seasonal changes have on their businesses.
“Utilize a tool like carrier target rate,” Maurika says, “and enable the company to set your target rate based on whatever the current market rate is.”
It’s also important for brokers to reference what their peers are doing and to utilize historical data where needed.
Wrapping Up
Seasonal freight can be unpredictable under certain circumstances, but it’s possible to work seasonal fluctuations into your transportation planning at a macro and micro level. To hear more from Keri and Maurika, listen to the full episode of McLeod Insights here.