I wanted to give a word of advice to shippers out there they may be using a freight carrier who is on shaky financial ground. If you are shipping with a freight carrier (I don’t want to say any names) who happens to be having a fire sale of assets, is facing a dilution of preferred stock, has a loss of customers and dealing with a very competitive LTL market you may want to make sure you pay attention.
When a larger LTL carrier goes out of business, it typically happens very fast. It kind of like you show up to work and you get a phone call from someone you know saying, “Hey, did you hear so-and-so went under?” Then you’re like, Oh crap! What are we going to do?
Generally speaking, shippers don’t have to worry that much about the shipments that are in that carriers system. The freight carrier will likely keep a lean staff on board so they can make sure they clean out their system of all remaining freight. However, some of those shipments may take longer than normal to deliver.
But what you do need to concern yourself with is which carrier is going to handle your business now, and how competitive of rates you will be able to secure.
When a large motor carrier leaves the business it helps out the surviving carriers because of the influx of new business. Carriers immediately get very selective of the business they want to move, generally keeping the more profitable business and dumping less attractive business. Conversely, what this means for shippers is that rates rise up or it becomes impossible to negotiate aggressive rates.
So a suggested solution if all of your eggs are in the shaky carrier’s basket is to hedge it and start mixing it up now. Engage another carrier and secure good pricing while you can. It’s wise to start feeding that carrier some business to keep them in the mix. That way, when that inevitable day comes for your carrier you won’t skip a beat.
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