We’ve entered a new year, but one thing remains the same: the freight industry is fraught with a number of challenges and inefficiencies. To gain a better understanding of where we are at and where we are headed, we sat down with members of the SemiCab team to discuss how collaboration can help us become more efficient and stable. As a Collaborative Transportation Platform, we know that collaboration begins with transparency. Here’s a snapshot of our discussion with Jagan Reddy, SemiCab Co-founder.
Q: Tell us about freight industry volatility, specifically how you predict 2021 will unfold:
A: Well, 2020 was filled with volatility, and I don’t believe that will slow down in 2021. So far, rates have started out strong for this time of the year, but I believe they will remain unpredictable for the foreseeable future. In fact, I think demand patterns are going to be similar to 2020 through at least the first half of the year, and I don’t foresee any significant additional capacity entering the market during this time. The freight industry also continues to struggle with a driver shortage, and this will place more stress on the industry as a whole.
Though this is all specific to what I see unfolding in the coming year, these aren’t new factors. The reality is, capacity fluctuations, lack of transparency, a driver shortage, and underutilized assets have been a problem in the freight industry for many, many years.
Q: What shortcomings in the freight industry do you believe contribute to continued market volatility?
A: There are so many factors that contribute to freight volatility, and many of them work hand in hand. For starters, a lack of transparency between shippers and carriers means they’re unable to collaborate, making their relationships fragmented, transactional, and reactive. So as peaks and valleys occur in freight due to global macro-economic shifts, regulatory changes, global challenges like the COVID pandemic, etc., there is no collaborative platform to bring shippers and carriers together to ensure stability in freight markets. Then, there’s dynamic pricing, which more often than not further perpetuates volatility as shippers and carriers chase better prices from their respective perspectives, leading to an abundance of capacity in some lanes and acute shortage in others.
Or maybe you’re curious to hear more about Collaborative Transportation Platforms instead? We can help with that too! Check out Gartner’s 2020 Market Guide for Digital Freight Models for Road Transportation which outlines the many digital freight options available. You can access a complimentary copy of the report here.