Lynnco Blog

From Shipper's Nightmare to Shippers' Delight: What the New Normal Looks Like

We are living in the post-pandemic landscape, which means things are changing rapidly for shippers, and what lies ahead is anyone's guess.

If you’re a shipper, we believe the future looks bright for you. But don’t be fooled, there are new obstacles that will stand in your way!

Continue reading and I’ll share a picture of what the new normal could look like.

But first, let’s take a quick stroll down memory lane.

Pre-Pandemic Comfort: Shippers Calling the Shots

Before the pandemic struck, as a shipper, you might remember growing accustomed to having the upper hand.

At the time, the shipping industry was facing a reckoning, as carriers and shiplines struggled with heavy debts and tight cash flows.

Emergency bailouts from public and private sector shareholders were the order of the day, and it was clear that the existing system was no longer sustainable.

On the demand side, shippers had enjoyed the luxury of getting their way for decades, obtaining goods at rock-bottom rates whenever they pleased.

Those were, for the most part, the ‘good old days’ when freight prices were more affordable, and you could transport your goods from one corner of the globe to another with relative ease. Sure, not everything was perfect, but the job wasn’t bad.

The COVID-19 Upheaval: Carriers Take Control

Fast forward to late 2019 and early 2020 when COVID-19 descended on the United States. A seismic shift in the balance of power occurred. Suddenly, it was the carriers who had the leverage.

Supply chains buckled under the strain of lock downs, and global trade ground to a halt. Freight prices skyrocketed, carriers were rejecting certain types of freight (mainly ugly freight), the invoices you received almost made you faint, and shipments were stranded in ports. Inventories were also bloated as most transitioned from a “just-in-time” to a “just-in-case” mentality.

If you were a shipper back then, you were most likely living in a bad dream and found yourself at the mercy of carriers. With so many influences outside of your control, the c-suite really woke up to the reality of how big of a role transportation played across the business.

The New Normal: What Lies Ahead for Shippers

Finally, in 2023, after three years, capacity began to rise while carriers slowly lost the pricing power they once had.

That brings us to today.

Current State: It’s a ‘shipper's market’ right now. Carriers and shipping companies have lost capacity power, and it’s shifted back into the hands of shippers. This means more open capacity, lower rates, and more leverage to build up service levels.

But what will the future look like? What is ‘The New Normal?’

Fasten your seat belts, shippers, because the next decade promises to be a roller coaster ride in the world of logistics. Here's a glimpse of what the landscape might look like:

The New Normal: For the next decade or more, shippers will continue to be in the driver’s seat and call the shots. There are some major challenges you’ll face, one of which is measuring the true impact of the logistics operation (i.e. an evaluation and assessment of the logistics department's performance and its effect on the overall business).

To really gain an accurate picture of your transportation’s performance, shippers will focus on three areas:

1. Reducing Costs:

In the 'new normal,' the race to secure the most cost-effective shipping rates will be more intense than ever.

If done strategically, shippers will continue to have the upper hand in negotiations with carriers, shiplines, and brokers, driving prices to fair market value to stay competitive.

However, smart shippers will not solely focus on the lowest prices. They will prioritize two other areas.

2. Optimizing Internal Operations:

Team efficiency will be paramount. Shippers will need to prioritize internal operations by implementing automation solutions to eliminate repetitive shipping tasks (like tracking, booking loads, and claims).

Process mapping across departments will become standard practice, ensuring seamless and swift order to delivery processing (including warehousing to transportation activities).

The metrics? Saving time and increasing output, which will save the company hours of unnecessary work.

Shippers will partner with outsourced partners to audit their process flows and understand where they are being wasteful and what should be done to improve operations.

3. Improving Customer Experience:

While lower prices are enticing, they can sometimes come at the cost of service quality.

Wise shippers will recognize the importance of ensuring on-time shipments to keep customers happy. That means prioritizing carriers and brokers that provide reliable and consistent service levels, who go above and beyond!

This means investing in real-time tracking capabilities to maintain visibility throughout the shipping process.

Smart shippers will use their logistics program as a way to improve customer satisfaction and achieve more repeat orders, at larger volumes.

Conclusion: Navigating the New Normal

The foreseeable future looks bright for shippers. You’ll find yourself in a 'shipper's market' where you could hold some real advantages.

But don’t get caught up in the race for lower rates, it’s dangerous. Wise shippers will prioritize revamping internal operations (saving their team time) and enhancing their customers experience (keeping their customers happy to ensure repeat business).

Only then can you measure the true impact of your logistics program!

Attention Shipper: Is this You?

Are you a shipper who manages millions of dollars of freight and feels like you’re not really doing anything with it to help the business grow? Maybe you’ve been stretched thin while tasked with saving millions of dollars this year, pressure to hit budget and KPI's. Or maybe your outsourced partner has fallen asleep at the wheel and doesn’t give you access to the data you deserve!

If this is you, this is a sign from above: Work with LynnCo!

Our top logistics problem-solvers can look at your data and find money-saving AND money-making opportunities you never thought possible! We are fast, proactive, and offer our Legendary Service Commitment to make sure you know we mean business!

Book your 12-minute discovery session to see if we can help problem-solve for you.