“Capacity isn’t something you find; it’s something you strategically secure”.
There is a point in every freight market when shippers realize that something has changed in the freight market. Trucks that were available yesterday aren’t available today. The carrier that used to accept almost every load is suddenly asking for more money. Transit times are getting longer. Tender rejections are climbing. Transportation managers start saying “We can’t cover it.”
Welcome to a tightening capacity market. For shippers, the natural reaction is to look for more carriers. Call more trucking companies. Send out more requests for quotes. Raise the rates. When trucks get scarce, simply adding more names to a carrier list may not solve the problem.
The real question becomes “How do I secure reliable capacity before I actually need it?” Part of the answer may be finding and hiring a good third-party logistics provider (3PL).
The Capacity Problem Isn’t Going Away !
The trucking industry is inherently cyclical. When freight demand is strong, trucks are scarce and rates rise. When demand weakens, capacity increases and rates soften. But there is another factor that shippers need to consider: the trucking industry’s economics. A trucking company has to pay for equipment, drivers, fuel, insurance, maintenance, technology, compliance and financing whether its trucks are moving or sitting. When operating costs rise and freight rates don’t keep pace, marginal carriers disappear. That matters because the United States doesn’t need every trucking company to disappear before shippers feel a capacity shortage. It only takes enough carriers exiting the market, or being committed elsewhere, to make available capacity leaner. When that happens, the shipper who waited until Friday afternoon to find a truck for Monday morning is not in a good negotiating position.
The Old Model: Find a Truck When You Need One won’t work anymore!
For many shippers, transportation procurement has traditionally been transactional. A shipment needs to move, someone sends the load to a carrier, the carrier accepts it, the truck shows up. Rinse, Lather, Repeat. That works reasonably well when capacity is abundant. It becomes much less effective when capacity tightens. Why? Because your competitors are looking for the same trucks. Your carrier isn’t holding capacity for you just because you have used them for five years. The spot market is designed to find the highest-value opportunity available to the truck and not necessarily the lowest-cost solution for the shipper. In a tight market, relationships and access to capacity become more valuable than simply knowing what the prevailing rate is.
This Is Where 3PLs shine!
A good 3PL can provide something a shipper may have difficulty creating internally- access to a much larger transportation network. A shipper may have 50 core carriers. A 3PL may have relationships with hundreds or thousands. That doesn’t automatically make the 3PL better, but it gives the 3PL something important, options. If Carrier A doesn’t have a truck, the 3PL may have another carrier that does. If capacity disappears in one market, the 3PL may be able to source equipment from another part of its network. If a particular lane becomes difficult, the 3PL can potentially combine the shipper’s freight with other freight to create a more attractive opportunity for a carrier. That’s the fundamental value proposition. A good 3PL isn’t simply a company that finds a truck, it is a company that helps a shipper access the transportation market.
Not All 3PLs Are Created Equal!
This is where shippers need to be careful. There is a huge difference between a 3PL that has a sophisticated transportation network and one that simply sends your load to another website and waits for someone to accept it. If the only value a 3PL provides is posting a load on a digital marketplace, the shipper should ask a legitimate question: What am I paying for? The best 3PLs bring more to the table. They understand individual carrier capabilities. They know which carriers are dependable. They know which carriers specialize in particular lanes, equipment and commodities. They know who is likely to cover a difficult shipment, and they have relationships that existed before your load appeared on the computer screen. That’s the difference between a transportation marketplace and a transportation partner.
Think About Capacity Differently!
When capacity tightens, shippers often focus exclusively on price. That’s understandable. Price is only one component of transportation cost. A truck that costs $1,800 and delivers on time may be far cheaper than a $1,500 truck that delivers two days late and causes a production shutdown, missed customer appointment or emergency shipment. The objective shouldn’t be “Get the cheapest truck.” It should be “Get the best transportation outcome at the lowest reasonable total cost.” That distinction becomes paramount when capacity is scarce. Use Your 3PL Strategically. You don’t necessarily need to outsource everything. In fact, that may not be the best approach. Instead, consider using a 3PL strategically. Keep your strongest core carriers. Give them your most important lanes and freight. Then use a capable 3PL to provide supplemental capacity, cover difficult lanes, handle overflow and help during seasonal spikes. Think of it as “CORE PLUS”, where the 3PL picks up the slack.
The 3PL can also provide market intelligence!
They know daily what is happening to capacity, which lanes are tightening, where rates are moving, which carriers are entering or leaving the market, are tender rejections increasing, which geographic markets are becoming problematic? A good 3PL should be able to answer those questions.
The Best Time to Build Capacity Is Before You Need It!
There is an old saying in logistics: “You don’t build relationships when you need a favor.” That’s especially true with trucking. If a shipper waits until capacity is tight to start developing carrier relationships, it is already behind. The better strategy is to establish relationships when the market is balanced. Identify strategic carriers. Understand their networks. Understand their equipment. Understand their strengths and weaknesses. Commit meaningful freight where appropriate. And create a backup network before the primary network fails. This is what 3PL’s have to do to survive and compete. Basically, a 3PL can help build that second layer of capacity.
Technology Helps, but Relationships are what matters!
Transportation technology has made it dramatically easier to find trucks. Digital freight matching, transportation management systems, real-time tracking and automated tendering have transformed the industry. But technology doesn’t create trucks. It makes the search for trucks more efficient. When there are 500 trucks available and 400 loads, technology can make matching those trucks and loads extremely efficient. When there are 300 trucks and 500 loads, somebody still loses. That’s when relationships, network density, operational expertise and creativity become valuable. And that’s where a strong 3PL can differentiate itself and help a shipper.
So, what is a Shipper to Do?
- First, stop thinking about capacity as something you buy one load at a time. Think about it as a strategic resource.
- Second, develop a core carrier network, but don’t become dependent on it.
- Third, build a credible backup network before you need it.
- Fourth, use 3PLs strategically, particularly for difficult lanes, overflow, seasonal demand and markets where your own carrier network is thin.
- Fifth, measure your 3PL on results—not activity.
- How often are they covering your loads?
- What are their tender acceptance rates?
- How does their pricing compare with the market?
- What is their service performance?
- How much administrative work are they eliminating?
- And perhaps most importantly:
- Are they giving you access to capacity you couldn’t efficiently obtain yourself?
That’s the real test.
The Bottom Line
Trucks aren’t necessarily disappearing. But reliable trucks in the right place, at the right time and at a reasonable price can become increasingly difficult to find.
For shippers, that changes the game. The answer isn’t simply to pay more. It isn’t simply to add 100 carriers to a spreadsheet. And it certainly isn’t to wait until the truck is needed before figuring out where it will come from. The smartest shippers will build transportation networks that are flexible enough to withstand tighter markets. They will cultivate carrier relationships. They will use technology intelligently. They will understand their freight patterns. And they will use 3PLs where those companies can provide something the shipper cannot efficiently create on its own, access to capacity, market intelligence and transportation expertise. Because when trucks get scarce, the shipper with the biggest carrier list doesn’t necessarily win. The shipper with the best transportation network does!Riverside Logistics is a great match for the Core Plus Program. We do this all day every day and can prove it with our metric measurements across a wide range of shippers.
