U.S. Bank’s Freight Payment Index, which charts the number of total shipments as well as rates in the contracted freight market, noted that Q2 2023 marked the second straight quarter of declining rates. With shipments and rates, respectively, having contracted 9% and 10.9% year-over-year, carriers find themselves in a more competitive and more financially pressured environment than they have in years.
As freight rates decline and loads become more competitive to win, I wanted to share six strategies that we have seen small carriers pursue to survive and thrive in a challenging market.
For the first time in the history of the U.S. Bank Freight Payment Index, the authors of the final report noted, Q2 2023 was the second consecutive quarter posting both quarterly and year-over-year declines in both total shipments and spending. U.S. Bank Q2 2023 Freight Payments Index report
If there’s one constant to all of these strategies, it’s that in a down market, you must find ways to compete on factors other than the rate per mile. When you’re competing on price, you’re a commoditized service. When freight markets and rates are down 10%-20% across the board, price wars are extra-punitive and can evaporate your bottom line. Don’t be afraid of a small niche -- the smaller the niche, the less competition you will often find. Become excellent at one profitable service, and then worry about scaling when markets recover.
[Related: Werner CEO shocked by small carriers' resilience through tough freight market]
The author of this story, Bryan Jones, is founder and CEO of Truckbase.com, a dispatch and transportation management software (TMS) company serving asset-based carriers with 5-50 trucks.
