Using the Down Freight Market to Prepare for its Turn

The freight market is currently experiencing the longest recession ever recorded, driving tough times for carriers and brokers alike. With an oversupply of carriers flooding the market for the past two years, we've seen a notable decrease in freight prices, which has had a ripple effect across the industry.

Many carriers are feeling the brunt of this prolonged down freight market, with some having to shut their doors permanently. This isn't just affecting small players; even the big guys are seeing their stock prices take a hit after announcing their Q1 earnings. For brokers, the situation isn't much brighter. With average shipment costs plummeting, brokers are finding their earnings squeezed from thinner margins built from cheaper shipping costs.

While these challenging times may seem bleak, it's important to remember that they won't last forever. Markets have a way of regulating themselves, and the freight industry is no different. As the market begins to recover, the dynamics will shift, and having robust freight booking operations will become crucial.

Brokerages haven’t had to worry much about their carrier sales operations given the oversupply of carriers in the market, but that won’t last forever. Now is the time for brokerages to strengthen their operations and prepare for the future. By shoring up carrier networks and addressing any operational gaps now, brokers can avoid the pitfalls of scrambling for solutions when the market tightens. Relying solely on 'post and pray' methods—posting loads and hoping for the best—will not be sustainable.

It's wise to consider load boards and how they're being used by the carrier sales team. Over-reliance on these platforms during times of heavy demand can lead to inflated costs and more frequent fall-offs once the market shifts back in favor of carriers. Brokers dependent upon load boards will find themselves paying higher rates with lower service levels as carriers gain more bargaining power against shippers.

The current freight market recession presents both challenges and opportunities. For freight brokers, the key to navigating this storm will lie in proactive adaptation and strategic planning. By building solid, reliable freight booking operations now, brokers can position themselves to not just survive but thrive when the market conditions start to change.