Breakthrough’s new study focuses on key shipper and carrier goals over the next 12 months

The need for freight transportation and logistics stakeholders to reduce emissions, collaborate on mutually-beneficial contracts, and deal with fluctuating linehaul rates were among the key themes in the “2023 State of Transportation” study, which was issued today, Green Bay, Wisc.-based Breakthrough, an innovator in transportation management, dedicated to creating transparent and fair strategies for the world’s leading shippers.

The study’s findings were based on feedback from 500 transportation stakeholders, including shippers and carriers, throughout the United States.

Looking at emissions, the study found that roughly 94% of respondents noted that consumer demand for more sustainable products makes reducing emissions a key priority over the next year. What’s more, it added that 99% of shipper respondents would leverage electric and alternative energy vehicles, if they were offered within their carrier networks, which was backed up by 79% of shipper respondents. Breakthrough also observed that, for carriers, 97% said they see value in adding electric vehicles (EV) to their fleets, with 59% planning to take action by the end of this year.

Breakthrough Chief Economist Matt Muenster toldLMthat in the short-term, freight transportation stakeholders can employ several strategies to start reducing emissions.

“移动货运道路和到railsis a great way to move freight in a more energy-efficient manner,” he noted. “Where these mode conversion opportunities make sense in a network in terms of service and cost, there can also be immediate emissions benefits. Additionally, partnering with suppliers and carriers who are already taking steps to reduce their own emissions can be a great asset to reducing your own emissions. Working with SmartWay carriers, who are committed to improving their own efficiency, can be a short-term win in this space. Utilizing a growing percentage of alternative energies in your transportation network can also help achieve emissions reductions. Certain alternative energies are ready to be implemented today, while others will likely not be viable for several years.”

As for the biggest challenges, in terms of reducing emissions, he explained that achieving buy-in within one’s own organization and across all stakeholders can definitely be a challenge when starting out on a sustainability journey.

“There are potentially significant on-costs in the near term that may not see a payback for several years,” he said. “Due to a lack of visibility into emissions data across the supply chain, it can be difficult to establish an emissions baseline from which emissions reductions can be tracked. Also, without near-real-time emissions tracking, it’s difficult to measure and monitor emissions reductions. Additionally, an organization may not have the in-house knowledge or experience required to employ an emissions reduction strategy, and finding an outside partner may prove challenging. These partnerships not only have to provide emissions reduction tracking and planning, but they also must be able to provide access to the physical assets required to actually implement an emissions reduction strategy.”

For contracts, Breakthrough found that 70% of respondents indicated that strengthening mutually beneficial transportation contracts is a key objective over the next year, which the study said may a “an encouraging sign with partnerships shifting to a more cooperative environment.”

One key way to ensure that happens, Muenster said, is being fully-transparent in terms of how accessorial and fuel costs can strengthen shipper-carrier relationships, coupled with working with partners and carriers that share the same values.

“There are likely to be collaborative wins when both parties are working towards similar goals such as efficiency improvements or emissions reductions,” he said. “Also, rewarding those mutually beneficial contracts with better pricing, improved service, or greater volumes can demonstrate a long-term commitment to the relationship for both parties.”

As for rates, the study found that 63% of respondents are calling for linehaul rates to stay higher than average over the next 12 months, due to increased labor and equipment costs, countered by how Breakthrough’s long-term expectations and internal pricing data note how truckload linehaul rates are expected to bottom out, or “hit the floor,” by year-end.

“Shippers should be thoughtful about how they source capacity and who they decide to partner with,” said Muenster. “Working with carriers that have a track record of providing great service with competitive rates is a great first step. Expanding volume and building strategic relationships with those carriers can help stabilize and reduce costs through market cycles. When dealing with unplanned loads, sourcing capacity in the spot market is a short-term option that can reduce transportation costs as spot rates currently remain below contract rates. However, this can leave a network exposed to rapidly increasing costs when the market eventually turns.”

Breakthrough also highlighted key focus areas for respondents over the next year, with 70% of respondents found that strengthening mutually beneficial transportation contracts is viewed as a key focus area over the next year. Some of the findings included: 50% found that establishing relationships with new partners to increase efficiencies; 33% cited reducing internal silos that hinder efficient transportation decision-making; 33% noted that reducing emissions in line with internal goals/science-based targets as a priority; and 29% cited consolidating vendors.