MoLo’s message from day one has always been about service. These past couple of months have pushed MoLo and its employees to show what that means. In an article published by FreightWaves, our CEO, Andrew Silver describes what it means to be MoLo during a challenging freight market.
The MoLo Solutions team is excited, proud, and grateful to be recognized for the work we’re doing to take care of our customers in such a challenging freight environment.
Driven by passion.
The company hasn’t been shy about its service-at-all-costs philosophy and what it’s willing to do to take care of its customers. MoLo’s executives have wagered the future of the company on their belief that shippers will ultimately reward loyalty and honesty.
Driven to deliver.
“If you can consistently deliver a level of service above and beyond the expectations set, you can not only grow, but you can grow profitably,” Silver said in a Zoom interview. In a companywide meeting with his team, he put it differently: “Today, we’re watching our competitors count their margin dollars. Tomorrow, they will watch us move their loads.”
Driven to do better.
“We think we can change the way shippers look at freight brokers,” Silver said. “We don’t think it’ll be easy and we know it’ll take years to achieve. Building a reputation doesn’t happen overnight, especially if it’s a reputation of excellence. Over time, we believe the loyalty we’ll build with our people, our drivers and our shippers will yield profitable results. We will never be the most profitable brokerage in the market on a per-load basis — it’s just not possible if you always service the freight. However, we can have healthy profits and own a massive piece of market share. Maybe all of it one day, if we do this right.”
MoLo is driven to uphold the values of our business.
The culmination of the COVID-19 pandemic and recent events around racial tensions has produced a shockwave of unrest not only throughout the general public but amongst leaders in the supply chain industry.
Understanding the responsibility to give back and stand up for those affected by these challenging times, MoLo’s CEO, Andrew Silver, took to the airwaves to share how the company plans to make a positive impact in both its industry and community.
In a recent interview on FreightWave’s podcast, “What The Truck?!”, Andrew shared his insight on the company’s priority initiatives:
To learn more about MoLo’s services, request to Talk To A Specialist.
While the spread of COVID-19 has certainly been the primary industry focus for the trailing 3-4 months, reoccurring seasonal events present new waves of challenges and opportunities for shippers of all sizes. As we enter the spring and summer months, typically, a surge in freight demand is observed in the marketplace due to one notable industry event that jumpstarts much of the transportation activity in early-mid Q2: produce season.
As consumers anxiously wait to be released from the confines of their homes to once again enjoy the beauty of the outdoors, demand for products and goods, like produce, continue to be shipped. Even with produce essential activities like picnics and backyard barbeques on hold for most of the country, the stockpiling of cabinets and fridges have kept demand for fruits and vegetables at a constant hum. For shippers, understanding the regions heavily impacted by the uptick in produce shipping as well as how carriers react to the heightened volumes is important to successfully navigate the ebbs and flows of the market. In addition, implementing supply chain best practices can help optimize and position facilities as a favored choice amongst preferred carriers.
Year over year, two states generally serve as the primary contributors to produce’s impact on the truckload market. Florida and Texas drive much of the nation’s produce volume during the early spring months. With sudden surges in volume sweeping across these regions, challenges to source capacity and limit heightened costs can arise for shippers. For Florida, major port cities like Miami serve as the focal points to shipping in the southeast. As imports and local produce gradually take hold of the market during early Q2, shippers are challenged with competing for coverage as rate premiums for produce heighten costs in the surrounding areas and states. Through the spring and early summer months, outbound Florida freight will support much of the country’s produce demand until freight in outside markets begins to loosen with the rising temperatures.
It is important for shippers to understand the significant uptick in freight activity to properly forecast and prepare their supply chain for potential disruptions.
For Texas, the influx of produce from Mexico and Latin America will cause strains at southern shipping points across the state. Cities like Laredo and McAllen drive the majority of outbound produce demand, and capacity in nearby locations will tighten as carriers reposition fleets south to take advantage of the surplus volumes and rates. Like Florida, shippers can expect costs for non-produce goods and products to potentially rise in these areas due to the spiked demand.
Arizona and California also deserve recognition. As the states that lead the demand for the western regions of the country, border cities experience significant increases in volume during this time of the year. As produce from Mexico crosses over into the U.S., freight moves up the western coast to support states in the pacific northwest as well as shipments reaching the mountain west.
With more freight available in the southeast, southwest, and west areas of the country, these regions become the early hotbeds of opportunity for carriers.
Referencing MoLo’s Regional TL Volume from Q1-Q2 2019, demand rose 27% across the west, southwest, and southeast areas of the US, making these states and surrounding regions pivotal in measuring the marketplace volatility during Q2. It is important for shippers to understand the significant uptick in freight activity to properly forecast and prepare their supply chain for potential disruptions.
To take advantage of the rise in shipments, carriers will make equipment alterations to make them suitable to haul certain types of produce. Outfitting dry van trailers with vents is a common practice during the season as well as some carriers switching out for refrigerated trailers to profit on the heightened demand for temperature-controlled coverage.
Fleets will also reposition their drivers to high-volume produce shipping lanes. To capture premiums on outbound shipments from produce heavy states, carriers will be more willing to haul inbound shipments at compressed rates as to not lose out on outbound rate inflations.
Establishing new revenue streams could be the new initiative for decision-makers as we cross the halfway point in the quarter.
COVID-19 has impacted supply chains across the globe for various industries, and the outlook for the U.S. truckload market remains widely uncertain. Specific to produce, favorable winter weather in produce states bodes well to have a strong season in 2020 and could look more favorable to carriers with other industries still on standby. However, as the general economy looks to rebound from the pandemic, shipping rates may not elevate to historical highs, thus, pushing baseline rates lower. While food will continue to grow, and consumers will continue to stockpile homes with fresh fruits and vegetables, small to mid-sized produce shippers could be challenged with locating new business opportunities to sell their crops. The closing of schools and restaurants, making up sizeable portions of business for shippers, hampered sales in the first part of the year. Establishing new revenue streams could be the new initiative for decision-makers as we cross the halfway point in the quarter.
Arizona, California, Florida, and Texas set the course for produce demand in the early part of the year. Look to these regions as key areas of interest through the spring and early summer months. As volumes gradually rise to make their way across the country, shippers in produce-heavy locations could experience competition to secure capacity for their shipments.
Dispatchers and fleet managers will outfit equipment and position drivers accordingly to reap the benefits of produce season. Having experienced a difficult start to 2020, carriers are eager to ramp up operations heading into summer. Produce season could be seen as a more favorable opportunity compared to years past as a result of other industries, not shipping products due to the pandemic.
COVID-19’s impact has shaken the truckload industry to its core. As it looks to resume full operation, small and medium-sized produce businesses may need to source new customers. Schools and restaurant closings have hurt sales and the time to sell to new markets in grocers or grocery-backed retail may be the new norm in the near future.
MoLo’s flexible carrier network has the dry and refrigerated solutions to service your produce. Start shipping with MoLo by submitting a quote today.
With produce season in full swing, the surges in volume, for many truckload shippers, have put strains on the available capacity in the marketplace to cover their shipments. States in produce-heavy regions have experienced drastic market shifts from Q1-Q2 as a result of not only the COVID-19 pandemic but the seasonal produce spike as well. As a result, many questions have been brought to the forefront from shippers as to how best to react to the various influences to ensure their freight operations remain intact.
To help answer these questions, we sat down with MoLo’s Vice President of Sales, Stephan Mathis, to get his insights on the historical impacts of the season and strategies shippers can implement to best work with their transportation partners.
A: Beginning in April and ramping up in May, Florida and southern Texas serve as key regions for tracking produce demand in the truckload market. Starting in Florida, port cities like Miami drive much of the volume coming out of the state. With domestic produce and imports making their way from these areas, shipments gradually move up through the southeast to be delivered throughout the country.
Along with Florida, southern Texas plays a pivotal role in produce shipping. Border cities like Laredo, and McAllen in particular, are primary areas of focus due to the produce volume from Mexico. As a result of the surges in freight, it is not uncommon to see capacity shift towards the U.S.-Mexico border during this time to capture premium demand posing challenges in nearby locations. Like Miami, produce and non-produce shippers in the Laredo, and McAllen regions compete over capacity to ensure their shipments are covered, thus, driving rates up. In turn, carriers will send drivers south to these areas during the seasonal freight spike to reap the benefits.
It is also worth mentioning Arizona and California as states that lead the demand for the western regions of the country. Produce from Mexico makes its way through major border cities trickling up the western coast to the pacific northwest as well as reaching mountain west states. Outbound lanes to higher volume areas will become desirable for carriers as they look to reload fleets back to produce heavy cities.
A: Both the 2018 and 2019 produce seasons were moderately tame compared to previous markets. As a result of poor farming conditions, as well as tropical storms, hitting much of the produce shipping states, the seasons were manageable for most of the shippers in the focal regions. You must examine the supply and demand of the industry as well. With 2019 serving as a year of capacity surplus, shippers could confidently procure providers at favored rates to move their shipments. Overall, many companies did not struggle to find available trucks both for their primary and spot allocations.
A: It’s difficult to say how the season will unfold with the volatility not only in the marketplace but in the larger economy. Prior to the COVID-19 pandemic, the favorable farming conditions forecasted for a successful season this year. However, since the outbreak, it’s difficult to determine how things will shape out at this time. With farmers facing potential challenges to source new markets due to the closing of restaurants and schools, the outlook of shipping operations remains unclear. Consumers will continue to buy fresh produce but the revenue streams may look different in 2020 for small to mid-sized farmers.
The modern transportation industry demands efficiency and scalability in a shipper’s supply chain network.
A: The modern transportation industry demands efficiency and scalability in a shipper’s supply chain network. To successfully navigate the ever-changing landscape, businesses must turn their supply chain operations into competitive advantages to grow market share. To do so, shippers must adopt and implement shipper of choice strategies and principles that will best serve their business in the long-term. While these strategies take time and resources, the investments made will attract high-service carriers to their network, elevating operations in the process.
While there are many practices to name, here are a few core principles:
Lead and forecast timelines play a critical role in shipping operations. Communicating accurate updates for product readiness and delivery options to transportation partners will help limit idle times and reduce accessorials at facilities. While some shippers are constrained in their ability to forecast shipments due to production schedules, ongoing updates can help carriers plan accordingly. Ideally, 24-48 hours of lead time, allows carriers to plan ahead and reposition drivers as necessary.
To help efforts, identify must-go shipments, and communicate the importance of service to carrier partners. Freight that has more flexibility can be scheduled accordingly to ensure high priority product gets shipped in a timely fashion.
Set carrier performance metrics and hold them accountable to those benchmarks. Implement carrier scorecards and reviews to help address underperformers and acknowledge those carriers who continually provide reliable coverage. Conduct reviews with carriers to ensure both parties are up to date on levels of service. Effectively communicate where they are performing well and discuss areas that need improvement. Being open and honest with carriers will help to hold them accountable for consistent service, and the strength of the network will elevate over time.
Procuring capacity early and often is a shipper’s biggest ally in limiting their freight to spot market exposure. By securing trucks early, shippers can allocate time to handling ad hoc freight that could pose an issue for their network. Understand how providers add value to the network. Inquiring about similar shippers they service is one method to align business needs to fleet capabilities. Take the time to learn how existing and prospective carriers can protect against market risks. With reliable, consistent coverage, shippers can focus on other areas of their business for future growth and monitor carrier performance.
Lastly, shippers should have a healthy blend of asset and non-asset providers in their network. When it comes to market fluctuations, being solely dependent on one provider poses risks to the entire operation. With multiple carrier options, tapping into excess capacity when issues arise is possible and allows shippers to analyze how carriers react during difficult scenarios.
Treat top-performing carrier partners well by offering them more opportunities to grow with the business. Build rapport with carriers and they will service freight well during the tough times and demonstrate flexibility when the market is more favorable for shippers. Premier shippers understand the strength of a network relies upon the relationships built with carriers. Take the time to align business needs. By understanding their priorities, shippers can establish strong relationships and trust with their core carrier base that will serve them well in the long-term.
With so much volatility in the marketplace, these best practices can help shippers safeguard their network against the risks associated with seasonal disruptions and gain a competitive advantage over their competition.
Need a strategic logistics partner for your produce operations? MoLo’s carrier network has the flexibility to help limit exposure to spot market uncertainties and help maintain reliable solutions for your supply chain.