The following is an excerpt from “TIA Conference Takeaways” written by Stifel Transportation & Logistics Research Group. JBS President, Alec Gizzi, attended the TIA conference this past weekend in Las Vegas. Alec has served as Chairman for the past 2 years for TIA and will remain on the Board of Directors as Past-Chairman for 2 more years.
Shippers Continue to Increase Their Use of Brokers and 3LPs; TIA Conf Takeaways
1. The Economy is recovering but at a slower pace than the main stream media suggests. This conclusion also applies to both the housing and automotive industries, which, according to the conventional wisdom, are helping drive the supposed acceleration of economic growth. In short, we appear mired in what continues to be a slow-paced economic recovery.
2. Shippers are increasingly turning to third party logisticians (3LPs) to reduce supply chain costs, access better knowledge and systems, re-optimize their supply chains, and reduce their full-time, fixed-cost overhead burden. Total/full outsources are still occuring and big shippers are beginning to embrace brokers for performing certain tasks not well-performed by the shipper’s private fleet, dedicated fleet, or core contract carriers. These tasks might include handling freight in unbalanced or light density lanes, handling surge freight, seasonal freight, or freight tied to promotions.
3. The onslaught of safety-related, environmental, fuel efficiency, and health care regulations is becoming increasingly burdensome on carriers, shippers, receivers, brokers, carrier employees, and whomever else might be tangentially involved in the movement of freight. The root cause of the accelerating burden on the private sector supply chain participants appears to be that the regulations are generally being written by well-meaning individuals that fundamentally do not understand the inner workings of the economy, the freight transportation industry, or the third party logistics industry…So as the Federal government and the states continue to implement additional regulations, they essentially erect barrier after barrier that prevent our supply chain from operating as efficiently as it could.