JOPLIN, MO — JANUARY 24, 2023 — Surviving in a cyclical industry, understanding inflation, finding balance with shippers, and the critical value of consistent relationships are all key issues truckload carriers navigate in today’s economic climate. CFI’s President Greg Orr tackles these topics in an insightful new state-of-the-industry video interview series.
“It’s a challenging time for truckload carriers, and in this environment, it’s important to be transparent with shippers and associates,” Orr notes. “That’s the purpose of this video series, to promote communication and education about important issues that impact us all. Looking from the perspective of a carrier, these simplified topics help folks understand the bigger, complex storm impacting our supply chains.”
The first of an initial series of four two-minute videos dropped today in the CFI newsroom, learn.cfidrive.com. Titled “Capital & Capacity,” it addresses cyclicality and how small carriers act as pricing and capacity bellwethers. The full series will be released one at a time in weekly installments, discussing the following topics:
• Capital & Capacity
• Fluctuations & Normalcy
• Oil & Inflation
• Relationships & Stability
In the first video, Orr discusses the role and impact of small fleets and independent owner-operators, and how they serve as a ‘circuit breaker’ for the industry when capacity gets tight. Moreover, as capacity loosens, how these carriers also influence downward market trends as they face two major hurdles: securing enough capital to support operating cash flow and fleet replacement needs and surviving in a market environment where rates have plummeted, and margins are tighter than ever or non-existent.
“It’s a cycle we see with every shift in the economy,” Orr notes. “Two years ago, you couldn’t find an empty truck and rates were through the roof. Now, the pricing pendulum has swung back to the shipper, and as rates have declined, capacity is leaving the market as independents switch to other career options.”
Ultimately, as capacity exits the market that drives balance and puts a floor under pricing, he notes. At the same time, costs in virtually every aspect of the business continue to escalate. These topics will be addressed in the next videos of the series. “Whether it’s fuel, tolls, driver wages, fleet maintenance, utilities, insurance, or general administrative and operating costs, our expenses are up north of 20 percent from two years ago. Add shipper requests for flat or reduced pricing, it is not sustainable in the longer term, especially if shippers want reliable capacity to stick around in the market.”
The next chapter in the series will drop on Tuesday, January 31. Go to the CFI newsroom, learn.cfidrive.com to follow along.
ABOUT CFI – CFI is a multifaceted carrier with a balance of asset and non-asset services driving supply chain solutions for businesses across North America. A wholly owned operating company of Heartland Express, Inc. (NASDAQ: HTLD), CFI’s portfolio includes asset-based Truckload and Temp-Control services as well as non-asset-based Mexico services. A staple of shippers, CFI delivers on time, safely as promised. Operations in Mexico combine intra- and inter-Mexico LTL and TL trucking with a robust lineup that includes: transloading, consolidation, deconsolidation, brokerage, and experienced cross-border. With Canada to Panama expertise, at CFI, people drive possibility. For more information, visit: cfidrive.com.
https://www.cfidrive.com
