Tim Breckenridge, the Sr. VP and co-founder of Rocket Logistics, shares his expert insights on how to succeed in trucking in 2023, with valuable strategies and advice for logistics providers looking to thrive in the industry.
First, Tim shares key advice for approaching shippers and winning business in the current market.
Understand Your Target “Don’t send out generic mass emails. Understand their network.” Before approaching shippers, research and understand their specific needs and network. Tailor your pitch to address the unique requirements of each shipper.
Create a Unique Model “Create a model that’s different than potentially what every other broker is doing out there.” Offer a distinct value proposition by providing services that set you apart from your competitors. At Rocket Logistics, they focus on a “carrier-first match with the shipper” approach.
Add Value to Stand Out “Get to know your shippers, add some value some way, be different than the guy down the block.” To win over shippers, go beyond just offering competitive prices; focus on creating value through innovative solutions and services.
Know Your Own Network “Know your network before offering it to a shipper.” If you’re an asset-based provider, be transparent about your operational capabilities and network. Be specific about your service offerings, top origin and destination points, and any additional features you provide.
Focus on Smaller Shippers “Don’t go for the targets, the Walmarts, the ones that are gonna have minimum truck requirements.” For smaller trucking companies, focus on small to medium-sized shippers instead of large corporations. Build a strong partnership with a hometown shipper to establish a solid operational base.
Build Loops Around Local Shippers “Build loops around that [hometown shipper], and you’ll find yourself being profitable.” Create efficient operational loops by partnering with local shippers and focusing on their needs.
Understand Your Break-Even Points “Understand your break-evens.” Analyze your origin and destination pairs to determine which routes are profitable and which are losing money. Focus on optimizing your operations to ensure profitability.
How Rocket Logistics Crafts Email Campaigns
Tim says to analyze historical data to identify top lanes and target shippers who match up with your operations.”We looked at their last two years of data and where they originated in their origin-destination pairs.”
From there came personalization and clarifying why they are contacting that specific shipper. “This is where our equipment lands. We’re emailing you because we understand your distribution matches up with either an origin or destination pair.” Craft a personalized email campaign highlighting your capabilities. So explain your truck count, trailer count, owner-operator count, and specific equipment types like van or reefer.
Next, emphasize your value-added services. For example, the ability to track, 24-hour customer service, EDI, and API. Showcase your value-added services in your email campaign to demonstrate how you can meet the shippers’ unique needs.
It also helps to include details about your insurance and cargo coverage to assure shippers of your commitment to protecting their goods.
However, you should remember that building relationships and winning business takes time and persistence. Stay dedicated to your efforts, and your business will begin to transform.
The Food Shippers Conference: A Unique Opportunity
“Food shippers is probably one of the best conferences that engages shippers, 3PLs, and asset-based carriers.” The Food Shippers Conference offers a unique opportunity for networking, as it brings together an even mix of shippers, third-party logistics providers, and asset-based carriers.
“It’s week-long networking; it’s almost like speed dating. “Everybody that’s there is open to networking.” So it’s a great way to gain insights. The conference offers an opportunity to learn directly from shippers about their current needs, supplier base diversity, and expectations for new providers.
Some of What Tim Learned at Food Shippers
“Shippers have a bloated supplier base right now because they needed extra capacity last year, but now that the market’s softened, they’re going to trim down their supplier base,” he explains. In this current market, it’s essential to demonstrate your unique value proposition to stand out and turn “no’s” into “yeses.”
Additionally, “being an incumbent right now is at an advantage.” Have you established relationships with shippers and provided support during the COVID-19 pandemic? Then you have an advantage in maintaining and growing those partnerships currently.
By attending the Food Shippers Conference and applying Tim’s insights, logistics providers can better understand shippers’ needs, differentiate themselves in a competitive market, and forge lasting partnerships.
The Rocket Logistics Strategy: Setting the Brokerage Apart
Routing Guide-Based Approach: Rocket Logistics employs a routing guide-based system. They ensure their carriers meet their “Ten Commandments.” This provides an extra layer of protection.
Transparent Relationships with Shippers: Transparency is key—Rocket Logistics shares carriers with shippers, fostering trust and open communication between all parties.
Focus on Front-End Sourcing: The company prioritizes upfront work in sourcing and building routing guides, streamlining the process, and providing excellent service.
Prioritizing Internal Carrier Base: The company prioritizes upfront work in sourcing and building routing guides, streamlining the process, and providing excellent service.
Avoiding the Risks of DAT: Rocket Logistics steers clear of the DAT load board to minimize risks, ensuring higher service quality and customer protection.
By implementing this unique strategy, Rocket Logistics differentiates itself in the competitive logistics market, offering its clients transparency, efficiency, and reliability. Their focus on building strong relationships with shippers and carriers sets them apart and drives their success in the industry.
Choosing Contract over Spot Market: A Focus on Stability and Efficiency
Tim emphasizes the importance of choosing contract freight over the spot market for stability, efficiency, and long-term growth. This approach minimizes service failures, financial risks, and labor-intensive solutions, enabling companies to focus on reinvesting in their businesses and securing sustainable growth.
Tim advises trucking companies to prioritize contract freight, ensuring long-term stability and profitability, rather than chasing short-term gains in the spot market
Securing long-term contracts can provide the necessary stability to reinvest in the business, grow operations, and buy new equipment.
“Wouldn’t you rather secure this business for six months instead of hustling for the next deal?” Tim asks.
How Rocket Logistics Handles Rates
Tim Breckenridge emphasizes the importance of determining a rate in trucking and its impact on profitability. He suggests that trucking companies should focus on the revenue per hour instead of the rate per mile, saying, “look at the actual revenue per hour that the driver is turning those wheels.” By analyzing the revenue per hour for the entire 70-hour clock for a driver, companies can identify areas for improvement and maximize profits.
Tim also advises against “throwing labor at a problem,” highlighting the significance of being committed to change and adapting to more contract-based work. He shares the value of building strong relationships with shippers and carriers, working on winnable freight, and diving into the numbers to create solutions that benefit everyone involved. By taking these steps, trucking companies can ultimately boost their bottom line.
Want more of Tim Breckenridge’s actionable and relevant advice for trucking companies? Don’t miss the full conversation with even more expert knowledge. Listen to the complete FreightCaviar podcast episode on Spotify or watch it on Youtube for a wealth of insider tips and inspiration.
As we enter the second year of Russia’s war in Ukraine, we are seeing more of its consequences reverberating across the globe. And while the war has brought tragedy to many, it has also created opportunities for others. In an article fromThe New York Times, we see the story of Georgia’s freight market boosting its economy by emerging as a key logistics hub for Russia.
Part of the reason Russia’s economy is still stable is due to the route through Georgia’s Caucasus mountains, where truckers carry goods from Turkey, Armenia, and Azerbaijan. This route is driving Georgia’s freight market growth. Georgia – Russia border is now overloaded with waiting trucks.
What’s Happening with Georgia’s Freight Market?
Cargo transit between Turkey and Russia tripled in volume in the first half of 2022.
The long chain of idling trucks was twice as long in December as it was a year prior.
Russia plans to expand the number of processing lanes, and Georgia is building a 5.5-mile tunnel for smoother operations.
Much of the freight is European parts and raw materials for factories.
What does the Georgian government say about the Freight Market?
The Georgian government says that it strictly enforces Western sanctions and that many shipments have been denied. However, opponents of the ruling party in Parliament say that goods and money are flowing through largely unhindered.
While some are profiting from this war, others suffer a food crisis.
The conflict between Ukraine and Russia, which combined accounted for a quarter of global wheat exports in 2019, has dealt another blow to the food supply for vulnerable communities, per CNN Business. Communities already dealing with the combined issues of the pandemic, high fuel costs, and extreme weather now have the added struggles from the conflict, reducing the flow of grains.
The food crisis impacts communities in East Africa and the Horn of Africa.
According to the UN’s Food and Agriculture Organization, the Food Price Index rose 14% last year compared to 2021.
The data says that the number of people dealing with acute food insecurity rose to 345 million from 135 million in 2019 globally.
The governments of Malawi and Zambia are dealing with the higher costs of importing food – rising by 145% and 120%, respectively.
Estimates say that more than 90% of wheat consumed in Somalia comes from Russia and Ukraine.
Things may get worse before they get better.
On the positive side, Ukraine has restarted food exports via the Black Sea and shipped 12 million metric tons of grain and other foodstuffs through early December. The falling price of energy has brought down the cost of fertilizer. Overall, food prices have been steadily declining.
However, food prices have stabilized at high levels. And while fertilizer costs are down, it is still at historical highs. Farmers are using less, which could result in smaller harvests. Russia has also been slowing down inspections of grain ships at Black Sea ports, leading to backups and costly delays.
Photo Credit: Sergey Ponomarev for The New York Times
At FreightCaviar, we believe it’s always important to look ahead and plan for the future. That’s why we’ve gathered exclusive freight market forecasts from top logistics executives for the year 2023. These experts will examine truckload demand and capacity trends from the past in order to make informed forecasts about the future of freight. They’ll also discuss the impact of these trends on businesses in the logistics industry. Get ready to dive deep and find out what the future holds for freight rates in 2023!
Meet Our Experts
Tim Higham is the President and CEO of AscendTMS, the largest TMS with 51,619 active customers. Higham’s software gives him live and real-time access to key information needed to give accurate forecasts.
Jake McLeod is the COO at EXO Freight, the world’s first open deck transportation marketplace driven by technology. McLeod has been in the industry for about 15 years and has seen the worst market (2008/09), an insanely high market (2021), and everything in between.
William Kerris the President of Edge Logistics, a company that’s been recognized for its record-setting growth. Kerr was named one of Crain Chicago’s 40 under 40, which honors company leaders who have successfully improved the world through their endeavors.
We’ve also got input from the CEO of a Leading 3PL, who wishes to remain anonymous.
The Good Times Can’t Last Forever
We’ve got to take a moment to look back. The buzzword of 2020-2021 was unprecedented, and it’s the perfect way to describe the freight market at the time. Such high rates weren’t normal – and this attracted a lot of newcomers and hurried decision-making.
CEO of Leading 3PL: I will say that a lot of our industry is historically not great at thinking long-term. We see companies make decisions that help them most today, here and now, without concern for long-term success and stability. I think some companies overcommitted themselves with hiring, unsustainably lucrative compensation packages…and other short-sighted decisions. As things have turned the other direction in the market, these same companies were forced to make unfortunate hard decisions. Starts with layoffs. When that’s not enough, things get bleaker. We saw a lot of that in the second half of 2022.
McLeod: Unfortunately, thousands (hundreds of thousands) of new carriers and owner-operators entered the market during this time and have no idea what normal rates look like, have never run a business properly before, overpaid for equipment, and could generally run a company that was profitable despite not being particularly well operated. Now that the tide has gone out, we are seeing who is swimming naked, and it is a lot of the industry – these carriers are going to be in desperate times to try and make their business work, or they will exit (voluntarily or by going out of business).
Higham: Amazingly, most people under the age of 35 haven’t experienced a real recession since they’ve been employed. But they’re about to, and it won’t be pleasant.
Predictions on the Market
As for 2023, here’s what the experts had to say.
Higham: I can literally see, in real-time (because of the 51,593 companies that use AscendTMS every day to run their logistics & trucking operations), the rapid downturn in rates on every load, the fewer viable freight companies out there, the lower total staff being employed at each entity, the lower number of trucks running, the lower TL and LTL volumes being moved, and the incessant squeeze on gross margins. These aren’t guesses, these are the real actual experiences of freight brokers, asset carriers, and shippers every single day.
Kerr: We will see a slower January and early February than last year, and then in late February/early March when most of the drop/drop shipper-national carrier rates reset to the 2023 rates, we will see the live/live spot market creep back up to a positive spot market through the summer and into peak season. By positive, I mean I expect that spot rates will be incrementally higher than contract rates on aggregate of live and drop pricing. That is not to say that we will have an inflated or accelerated spot market, I do not think that will occur in 2023 except in short bursts, regionally.
McLeod: What we are seeing is honestly a return to “normal” – the truckload market rates we saw in late 2020, 2021, and early 2022 were not normal or sustainable and truly a bubble (much like everything mentioned previously). While carriers scramble for business, they will take freight for cheaper and cheaper rates, as there are fewer and fewer load opportunities available as production slows, spending slows, etc. At some point, (I keep hearing from people Q1 or Q2 2023, I think it will be closer to 2024,) rates will hit a bottom and then likely bounce up a bit before settling into a normal market rate again (which I think is still lower than we are seeing truthfully). This will be due to capacity crunching again, consumer confidence and spending increases, and an overall increase in economic activity.
Forecast Data from Arrive Logistics
To summarize the report from Arrive Logistics, freight rates in 2023 are expected to be more stable compared to the previous year, with long-term contract rates returning to more typical levels. There may be less demand for shipping services, leading to more available capacity and making it easier for companies to stick to their preferred shipping routes.
However, there may be fewer shipping options available in the first half of the year due to a decrease in capacity, which could leave the market vulnerable to disruptions. There is likely to be less capacity available in the market due to high contract rates forcing some owner-operators and small companies out of business. However, this decrease in capacity may be offset by the influx of capacity that entered the market in the past and strong routing guide compliance.
Demand for shipping services may be impacted by a cooling economy and lower consumer spending, but demand may be supported by the need to fulfill backlogged orders in manufacturing and other industries.
How will these trends impact companies?
These market forecasts are important because they shape how businesses will move in the environment until a new pattern arrives. Of course, nothing can be said for certain, but smarter leaders will adjust their behavior accordingly. The experts give their thoughts on how the trends will impact logistics companies.
Higham: Massive cost cutting will be needed by a massive number of companies in 2023 (and, if you have a big salary that was negotiated during the excesses of late 2020, 2021, or early 2022, watch out). But, every recession can also be an opportunity. Those companies that prepared for the inevitable “rainy day” will manage to stay solvent, and they’ll pick up the customers of those that don’t.
CEO of Leading 3PL: If the trend continues with volumes and rates declining, things will get much worse for that same set of companies[who made short-sighted decisions]. I think right now, there’s a lot of “holding on”, trying to make it through the downturn. If this lasts long enough, those short-sighted companies won’t have the resources to sustain themselves. Hopefully, things turn around soon and business booms again. But if not, things will get uglier before they get better.
McLeod: I am not a doomsayer or getting political by any means either just being real with what I see happening, what I have seen happen, and where I think we are heading and where we are at. 3PLs/Brokers are not immune to this either, as we have seen thousands laid off in the last few months from many of the major players, and I am sure plenty we have not heard about from the medium and small players, not to mention the most recent news from CHR)
There’s a consensus that in 2023, companies will be more risk-averse, in addition to looking for any way to cut costs. This could be a good opportunity for those looking to gain new business. Long-standing partnerships may not be holding as strong when it comes to keeping a company afloat.
Higham: Freight executives are looking to save money right now, and they’ll give their business to those that can show instant ROI. In 2023, people will be more interested in securing cost savings than ever before, and so they’ll finally be willing to go through the pain of switching providers to realize those savings.
So, there could be room for growth and innovation, particularly regarding freight sales technology. Any tool or service that can streamline processes or lower operating costs might have a good year. Our experts discuss why businesses like theirs are in a prime position to take advantage of the coming market conditions.
Higham: Freight sales technology will be at the forefront this year, like ShipperCRM, to secure more (and better) shippers, high-value TMS, like AscendTMS, to eliminate TMS costs, and more automation, with freight AI, to reduce headcount. Everything a broker, carrier, or shipper uses in 2023 will be about VALUE!
McLeod: I am fortunate that EXO is at a point where we have nowhere to go but up, and we continue to capture new business opportunities from new and existing customers. We have built a better mousetrap for carriers and shippers to do business. While traditional brokerage models are not going anywhere, they will have a harder time defining their value prop as time marches onward.
Things don’t seem catastrophic, but companies will feel the pressure this year. It depends on the mindset and decisions a company made in the past that will impact its longevity.
McLeod: So while this all may sound pessimistic, I think it’s more just understanding that there was always going to be a correction coming, and if you thought that 2021 was going to be here forever and not a black swan event then you’ll be in for a really rude awakening, this is not a get rich quick industry. There are ups and downs, but there is a happy normal, and we are not far from that, but there will still be some pain to endure before we get there. Those that have built good businesses will come through better than before.
General Thoughts From Instagram Followers
FreightCaviar’s Instagram poll brought in 1000 responses from followers, who are mostly made up of people working actively in the industry. We asked followers, “Will the market bounce back in 2023?”
48% said yes, the market will bounce back fine in 2023.
52% disagreed. They think we won’t see things improve in 2023.
Take a look at some of the written responses below.
FreightCaviar Instagram poll responses to “What are your predictions for 2023?”
So, of course, many external factors can make the market unpredictable. And here, experts have provided a range of predictions, from more stable rates and healthy demand to the potential for disruptions and lower capacity. It is clear that the market will continue to evolve and that businesses in the logistics industry will need to stay informed and adapt to changing conditions to remain competitive. It is important to stay up-to-date on industry trends and developments and to be proactive in planning for the future (like following FreightCaviar, for example). By staying informed and taking a long-term view, companies can be better prepared to navigate the ups and downs of the freight market in the coming year and beyond.
In a statement, Mediterranean Shipping Company, MSC, has denied allegations made in an exposé from Bloomberg that its company has been “infiltrated” by the Balkan drug cartel.
MSC, founded in 1970 with headquarters in Geneva, Switzerland, is one of the largest shipping companies in the world, operating a fleet of over 700 vessels and present in over 150 countries. It carries an estimated 23 million TEUs annually.
What’s in the report from Bloomberg?
In 2019, US authorities seized a jaw-dropping 20 tons of cocaine, worth about $1 billion, from the MSC Gayane at the Port of Philadelphia. Several members of the crew were found guilty in connection with the operations. Due to the magnitude of the crime, authorities seized the entire ship as well.
In an accompanying Bloomberg Original video, reporters Lauren Etter and Michael Riley detail how such a large-scale operation took place. They reveal that The MSC Gayane cocaine operation involved eight crew members, including the chief mate, who loaded cocaine onto the ship by crane from smaller boats that sailed alongside the enormous vessel in South American waters.
Bloomberg goes deeper into the background of these eight workers…
…and discovers that four of them were directly recruited for operations aboard the Gayane. This led them to Montenegro, a country known for skilled seafarer labor. MSC has the biggest shipping recruitment ties to the country, employing over a third of all Montenegrin sailors.
That’s where the Balkan Cartel comes in.
Etter explains the widespread control organized criminal groups have had in the Balkan since the breakup of Yugoslavia, the Balkan wars, and the subsequent collapse of the economy. So, Etter goes on, it only makes sense that the Balkan Cartel would target sailors on MSC ships for recruitment in nefarious operations.
Riley says that MSC was made aware workers were being targeted by Balkan cartels…
…and had ample opportunity to curb the issue. MSC management was reportedly approached by at least three different countries about the problem. The opinion of law officials is that the company did not do enough. But MSC has a different view.
They defended their vetting procedure, saying the traffickers used “groundbreaking methods” that could not be foreseen or predicted by any honest shipping company.
They had increased security on ships going from South America to Europe.
Mainly, the company argues that illicit trafficking is an industry-wide problem and that shipping lines and staff are not mandated, resourced, or trained to confront the dangerous individuals who operate organized criminal organizations.
The Bigger Picture
US authorities have calculated a $600 million fine and want the company to completely forfeit the Gayane in a civil case against the company. MSC has paid $50 million to “bail out” its ship in the meantime. The case is important because it will determine how much, if any, responsibility MSC and other shipping companies bear when incidences like these happen.
Another win for robots! Locus Robotics, based in Massachusetts, has made a name for itself in the thriving warehousing robotics industry. This week Locus announced a $117 million Series F led by Goldman Sachs, G2 Venture Partners and Stack per TechCrunch. The company’s total funding is now around $400 million bringing Locus’s valuation close to $2 billion.
Locus is a standout among others in the industry like…
Verity AG
6 River Systems (acquired by Shopify)
Geek+
RightHand Robotics
Amazon Robotics (formerly Kiva Systems)
We can only expect ventures like Locus to boom…
…considering the accelerated growth of the eCommerce sector and rumors of names like TikTok pushing into the US market. In recent days, we’ve seen digital orders set records this Black Friday. In order to stay competitive, you’ve gotta bring in the bots.
Of course, industry giant Amazon still dominates. They were one of the early adopters of automation, acquiring Kiva Systems for their fulfilment centers back in 2012. Amazon sets the standards and goals that smaller retailers have to catch up to. Because of that, robotics startups have cropped up everywhere to bridge the gap.
Like others, Locus assures the public that no, our robots won’t run you out of a job.
They say they “understand the importance of having robots that work collaboratively with workers, not replace them.” They illustrate the point with digital line art showing an at-ease worker leaning against one of their robots. See? Total harmony.
For the future…
Locus looks towards further solidifying its place as a leader in the warehouse robotics space.
Powered Trailers Coming Soon Thanks to Range
Based in Mountain View, California, Range has created a powered trailer to “accelerate the electrification of commercial transportation” according to their website. Range was founded in 2021 by Ali Javidan, a former head of prototypes at Tesla.
How do They work? Range explains on its site:
An “integrated sensor and powertrain system” power the trailer.
A smart kingpin unit measures the load the trailer places on the truck.
The smart kingpin, sensor, and system communicate with one another, reducing the load on the engine under acceleration and recapturing kinetic energy using regenerative braking.
The trailers use standard interfaces and are compatible with both diesel and electric trucks. Even if the trailers weren’t plugged in, they can still safely haul cargo.
Who’s interested and why?
It makes sense that smaller trucking companies might be interested in this more cost-efficient alternative. The Tesla Semi, which reportedly completed a 500-mile haul, costs $180,000 or $150,000 for the 300-mile-range option.
The FMCSA has made its environmental priorities clear, wanting to curb engine emissions and pushing towards the adoption of zero-emission trucks. California leads the way in electric vehicle initiatives with goals to phase out diesel trucks in the next 20 years.
Range’s powered trailers could really help the little guys…
…stay relevant in this fast-changing industry. Their audience is clear to them. Range markets the powered trailers as a “practical, compliant, near-term solution to emissions mandates.”
According to Range, their trailers “reduce diesel consumption and tailpipe emissions by 41% in combined city/highway driving, with no increase to cost-per-mile.” And for those companies that may already have electric vehicles, the powered trailers extend the miles driven before the EV trucks need their next charge-up.
The company recently raised $8 million in Seed funding led by Up Partners, R7, and Yamaha Motor Ventures.
Latest and Greatest From Around the Freight Web
Somebody Help!:On Monday night, Biden called on Congress to take action to avoid a freight rail strike. On Tuesday, Congressional leaders spoke up, expressing support for legislation on the issue. Speaker Nancy Pelosi said, “Tomorrow morning we will have a bill on the floor.”
Drug Bust: A truck driver was stopped at the US-Mexico border where his load of “surgical kits” turned out to be hiding 22.97 pounds of cocaine (an estimated street value of $291,760). In a statement, the driver said he was “obligated” to move the drugs.
Korean Wave: South Korea’s trucker strike, the second one this year, rippled through the supply chain. The disruption blocked access to two of the country’s busiest container ports. Following a 6-day strike, the truckers have now been ordered back to work.
Final Battle: In the battle of the brokers, many see 2023 as the time to prove yourself or sink. Legacy brokers like C.H. Robinson and RXO have expanded their own automated systems to compete with native digital brokerages like Uberfreight and Convoy. For smaller firms without AI tech…things will get pretty rocky.
Fast Friends: Turvo and DAT have formally announced their partnership bringing efficiency in the form of a “one-stop shop” for freight matching. DAT VP of Sales says their load board network will host more than 535 million load and truck posts.
