呼应全球物流CEO御夫座评估市场conditions and trends

万博2.0app下载Group News Editor Jeff Berman recently spoke with Doug Waggoner, CEO of Chicago-based Echo Global Logistics about various topics, including: the state of the freight economy, Peak Season, and the trucking market, among others. Their conversation follows below.

Logistics Management (LM):How would you assess the overall state of the freight economy as we inch closer to the mid-way point of 2021?

Doug Waggoner:I think the freight economy continues to be very strong. Of course, it is going to look super-strong right now, because if you go back a year ago, we were in the depths of Covid, so it makes for a pretty easy annual comparison. Aside from that, I think there is a lot of demand for capacity, and capacity continues to be tight, and we don’t see that letting up anytime in 2021 and continuing into 2022. If you think about the various inputs to that…. our economy is recovering, businesses are opening back up and are trying to rebuild their inventory and trying to hire workers. There is stimulus money that is circulating through the economy, and that money has a multiplier effect. It seems like all the economic drivers are going to continue to account for continued strong demand. There is also potential infrastructure spending in the not-too-distant future that will have another stimulus effect. We really are forecasting continued strong demand, and capacity continues to be tight. The truck driver shortage is real. I think a lot of the asset-based carriers have constrained themselves on buying new trucks, because they don’t have people to drive them. When you put the supply and demand pieces together, we are going to see continued tight market conditions and elevated prices.

LM:Regarding capacity, things remain difficult for shippers. DAT recently observed that shippers are getting to a point where logistics costs are just getting out of control. What are you telling your shipper customers on that front, as it relates to pricing and rates, as well as ways to maybe mitigate that current situation?

Waggoner:当然,我们不是告诉他们任何他们don’t already know, as they hear it from all of their transportation partners, and I think they get it. The big challenge for them is how do you create a budget and live within your budget, when the price you are paying is up dramatically. It varies by shipper in that a lot of shippers that have routing guides are trying to get a little bit more creative on how they renegotiate those. Obviously, the shippers that have put a lot of freight into the spot market would like to get it back into their contractual routing guide rate, so, at times, that motivates them to renegotiate their routing guide. Sometimes they do it in ways we call a “mini-bid,” in which they will pick the lanes they are getting hit the hardest and having to use the spot market the most, and are willing to renegotiate those rates so that they can attract capacity. Other people are delaying their bids, because they want to wait and see what happens. It is really all over the map, and a lot of it has to do with when was the last time they bid their rates out.

LM:Why is that the case?

Waggoner:If they did it a year ago, they are probably getting crushed and having to go to the spot market. If they did it last month, they probably are able to put more of their freight through their contracts and not have to rely on the spot market. The other thing is if there are other options—like consolidating LTL and moving it as truckload, or divert over-the-road truckload to intermodal—there are ways to try to mitigate costs, but you need to have the flexibility as a shipper to do that.

LM:Are you seeing those modal shifts you mentioned fairly often and are those typically done for certain types of shippers?

Waggoner:There are shippers breaking up truckload shipments into LTL simply because they have to move it. It really does vary. For a big truckload shipper, they have the freight they put in intermodal, for example, but they may not have a lot of options. It really varies by the shipper and what its capabilities are. We are seeing some modal shifts, but I would not say it is extensive.

LM:How do you view the ongoing import boom, and, as a follow-up, how does that intersect with Peak Season prospects?

Waggoner:One thing, for sure, is that inventories were at record lows because of some of the disruption to ocean freight coming into the ports. There was the pandemic disruption, ports being backed up, the Lunar New Year, and everything compounded. Meanwhile, shippers have to rebuild their inventories, especially in a high-demand environment. There is consensus that it is going to take months to get inventories back to levels where shippers would like to have them. Given how much freight comes from the Pacific Rim, that portends extended port congestion and a lot of volume coming into the ports. As for Peak Season, we are in this elevated state, with inventories low. Peak Season always happens, and this year it is likely to be more normalized on top of an elevated base. I think that the counterbalance could be that a lot of this consumer spending we have seen over the last year, with people staying at home might abate a little bit now that people are again starting to go out to restaurants, go on airplanes, and take vacations. It might be that even though people have some more money in their pockets and getting out of the house, they will be spending more on services and entertainment than they are on hard goods.

LM:The recent Colonial Pipeline IT hack was another example of supply chain disruptions in a year that has already seen a fair amount of them. Do these things put an increased onus on risk management, in your opinion?

Waggoner:The way we manage those things is to make sure we have access to plenty of capacity. We normally have about 50,000 carriers in our data base that we can work with on truckload. Up until the beginning of this year, we would typically work with about 8,000 of them in a given quarter. In the first quarter, that jumped up to about 12,000. It just kind of shows that one of the benefits of our business and our model is that we can tap into a network of capacity to help our shippers out, just because we have such a big rolodex.

LM:How do you view the current state of transportation infrastructure, as legislation is being proposed, at a time when it is really needed, but remains slow to develop.

Waggoner:With the Democrats having the House, Senate, and Presidency, and the belief that it is needed, as it is a stimulus to the economy, I cannot see how they don’t come up with something. It is also a way to attach changes to the tax law to generate more tax dollars. The intelligence I have says there will be a rebuttal deal that has a tax increase on the tax brackets so that the rates will go up, and capital gains rates will change. I think it is a good way for the Democrats to get what they want, and they have the power to do it so I would be surprised if they don’t do it. We really need to do it. The longer we wait, the more it costs. It is going to be painful, but I think it is something we need to do.

LM:With more people getting more active in services-based things like going to movies and taking vacations, as we touched upon before, what do you think the potential shift to more of a goods-buying economy is, or will be, on freight tonnage and volumes?

Waggoner:它会有一些效果。我们看到了扭转代用t when everyone was locked up at home and were buying things on Amazon and doing home projects and other things. The inverse is true, and people will do more services things and buy less home goods. At what point have people bought enough stuff for their homes? There will be a component of that, reducing some of the volume, but I think it is going to be offset by a very robust economy. And the industrial recession we were in over the last year has rebounded, with industrial production up, which is an offsetting factor, as is the import situation. There are a lot of inputs as to what makes up the overall volume. I think the return to services will have a negative effect based on consumer spending habits…but the positive inputs will, again, offset it.