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“This is the time to be sucking up to your customers like crazy. Because your customers know your exposure [to the regulations] is out there, they’re much more likely to do long-term deals with you now.” —Transportation economist Noël Perry
“The 3PL market is going to continue to grow; carriers are going to continue to thrive. 2016 is going to be a remarkable year if you take advantage of it.” —Internet Truckstop Group founder and CEO Scott Moscrip
Transportation economist Noël Perry briefs supply chain executives as Internet Truckstop Group founder and CEO Scott Moscrip looks on.
DALLAS. Keep your friends close and your shippers closer, truckers: A recession in the U.S. becomes increasingly likely over the next three years, noted several transportation analysts this week.
Indeed, the R-word worked its way into numerous presentations at Connected 2015, the Truckstop.com user conference here.
Economist Noël Perry, senior consultant for FTR, cautioned the gathering of brokers and carrier representatives about the possibility of a significant economic downturn, and while the chances next year are small at 15-20%, they climb to 35% in 2017, with the “cumulative probability” for 2018-19 being “almost certain.”
“Now is the time to go long on your relationships with your customers,” Perry said. “Lock in your relationship so you are the guy who gets the freight, not your competitor.”
Businesses need to make sure cash flow is solid, and “now is not the time to spend big capital” unless, Perry qualified, there’s a two-year return on that investment. He also noted that many carriers already have been purchasing new equipment, and that will give them an advantage in terms of lower maintenance costs as fleets weather the poor economy.
“It isn’t something I would be putting in your business plans for next year, but it’s something to begin to think about,” Perry said. “Once we get into ’17 and ’18 it becomes a realistic issue.”
From the shipper perspective, NASSTRAC Executive Director Gail Rutkowski confirmed the importance of those relationships.
“Shippers have long memories,” she said. “They remember who helped them out and who didn’t. They’re going to go back to those folks that they can rely on and trust. All the technology in the world isn’t going to replace that relationship—and it works both ways.”