Insights & News

Planning Your 2019 Supply Chain Strategy? Prepare for Continued Rate Increases.

The word "PLAN" spelled out in wooden blocks

Posted On November 28, 2018

With a month left in 2018, now is the time to finalize your 2019 supply chain strategy.

And what should you plan for?

To begin with, continued increases in ground transportation rates. While the Cass Linehaul Index—which measures U.S. per-mile truckload rates before fuel surcharges and other expenses—showed a decrease in the year-over-year rate of increase from September to October, most supply chain experts predict continued increases in rates in 2019.

It isn’t just industry experts who foresee more of the same in the coming year. Companies big and small are also anticipating continued rate increases.

“Trucking costs will likely be up 25% or more versus last year’s inflated levels this fiscal year,” said Jon Moeller, CFO at Procter & Gamble.

While the pace of rate increases (and skyrocketing revenue at trucking companies) may soften in 2019, the basic dynamic for supply chain managers and shipping departments remains the same: Ground transportation will continue to be a significant expense and an important strategic factor driving business decisions in the coming year. That’s one reason why so many shippers continue to search for an adaptable and innovative third-party logistics company (3PL) partner that can scale with their company as it grows.

For shipping departments, news about continued high rates, strong demand, and record profitability for some trucking companies can be tough to hear—especially when the only apparent light at the end of the tunnel is a general economic slowdown, which no one wants (and isn’t predicted for some time).

So, what can shipping managers and supply chain executives do?

Be strategic.

Be proactive.

And do not underestimate the importance and value of partnering with a 3PL that is solely focused on a multi-pronged strategy aimed at creating a more visible, efficient, and cost-effective supply chain.

Even in the face of continued high rates.

For example, cargo that travels on a ship before it’s loaded onto a truck can benefit from Flat World’s container optimization technology, which turns what is essentially a game of high-stakes Tetris into a cost-saving strategy for your company. In addition to innovative approaches to containerization, once your goods are loaded onto a truck (regardless of whether they ever travel on a cargo ship), our state-of-the-art technology offers a more efficient way to manage your less-than-truckload (LTL) and truckload (TL) transportation dollar.

We know shipping departments have felt the pressure of relentless rate increases for some time. According to industry research and experts, the best they can hope for in the foreseeable future are smaller increases. While an 8% year-over-year increase is certainly better than an 11% increase, the continued impact of increasingly expensive ground transportation will be the primary challenge many supply chains face in 2019, just as it was in 2018.

The Flat World family of companies is here to help.

Flat World Supply Chain, Flat World Hospitality, Ram International, Ram Custom Crating, and Prologue Technology can partner with you to create a comprehensive supply chain-management strategy that will make your shipping department a competitive advantage in 2019. Our team combines the industry’s best technology along with a team of experts who bring decades of experience that will help you solve your toughest transportation challenges, including continued high rates.

Contact us today, and the Flat World team will work with your team to make 2019 your best year yet.