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  • Writer's pictureNick Klingensmith

The 3 Reasons You Should Stop Complaining About a Soft Market

Updated: Nov 12, 2019


Value, Partnerships & Valued Partnerships


While manufacturers strive to stay competitive and truckers struggle to stay profitable, the broker is subject to the best and worst of both worlds. Whether the market is tight or soft, the role of the broker is to procure reliable, affordable capacity for shippers while providing consistent, profitable business for truckers and creating enough value to both to stay relevant.


So, here’s 3 reasons you should stop complaining about a soft market:


1. You’re NOT all about price


For years, asset-based carriers have complained that brokers are the reasons for depressed profits. They’ve said that a broker can get you a cheap rate, but not a truck. They’ve said that brokers only sell on price. Brokers have long held that they aren’t about a low price but rather creating value by providing choice, finding efficiencies and driving process improvements.


When you complain that the market is soft, you’re admitting that they were right.

A soft market basically means there are more trucks than freight, forcing truckers to be more competitive. This means lowering rates, which in turn, makes it harder for brokers to pull shippers away from going to carriers directly.


If this is the case for you, don’t kid yourself. You’ve been selling on price all along.


2. You ARE all about relationships


Be a valued partner, not a value partner.

Treating carriers as your product isn’t the same as treating them as your partner. A product is a commodity that can be replaced. A partner is someone whose interests align with your own. You should care about the profitability of the truck driver as you do your own.


There's a cost with just sticking the key in the ignition.

The price can only go so low. Consult with your shipper to maximize drive time. Drivers get paid to drive. Detentions, layovers and additional stops hurt the carrier’s ability to be efficient and therefore, profitable. The driver is less likely to dig in on your shipper’s process and school them, but you can prove your value to both parties by addressing these and other issues.


3. Focus on Value Creation


Apple doesn’t complain about depressed profits because of an influx of cheap flip phones into the market.

In fact, we pay copious amounts of money for our Smart Phones because we perceive them to provide us with great value.


While a single truck can move a load for less and an asset-based carrier can provide consist capacity on some lanes, they are limited by their equipment. If the business needs are greater and they usually are, it opens the door for a 3PL to create value. As simple as a one stop shop, or as complex as managing the process from top to bottom, it should not take so many vendors to manage just one business problem.


You just may have to adjust your target market. Focus on the companies that in fact, have needs beyond a cheap truck. Transport costs include many factors beyond the price per mile.


Somewhere in the middle should be consolidated and customized invoicing. Automation. Process efficiencies and most importantly the flow of information to the people who need it, when they need it. Shipping decisions are made with money. Business decisions are made with data.


That’s not to say that the soft market won’t impact profits. As will any other market disruption in any industry. But also across any industry it tends to be the company that creates the most value that thrives. So, if you want to make more, do more.

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