In The News

2017 Expedite Industry Update

The information below is a result of talking with many transportation executives over the past 15 months plus other industry journal reviews.

January and February: January started strong, but faded in the last part of the month. February started slow, but picked up near the end of the month..

March 2017: The first few days of March were quiet, but the people I talked to this week say they are seeing an uptick in business. In my opinion, this is a seasonal uptick (see my Expedite Market Cycle analysis below).

The Expedite Market Cycle
I have been working on expedite technology since 1995 (22 years) and the cycle seems to be as follows:

• January – slow out of the gate. However, this year, the first few weeks of January was stronger than normal. This gave some hope to transportation executives. Then the latter part of January hit and things slowed down.
• February – continued weakness. This year was no execption.
• March – usually starts slow then pick. The last few weeks of March are traditionally strong as shippers try to get inventory off their docks and recognize revenue for the first quarter.
• April – the first few days are strong as shipments from the end of March make their way through the system. Then April tends to chug along a little better than February.
• May – It's summertime in North America. The snow is finally gone (woo-hoo!) from all parts of the country. Everyone is building that new deck, buying that new barbecue, putting in the new back yard swimming pool. House construction starts to hit full stride. This buoys the trucking industry to March levels or better.
• June – Like March, the end of a fiscal quarter. So shippers want freight off their docks to book revenue in the quarter and in the half year. When the auto industry was in full swing (years ago), this was also known as "build out" where the prior year models (in this case 2017) would be finished in preparation to begin the new model year (in this case 2018). Supply chain officials were frantically managing inventory levels so as to order "just the right number" of parts for the model year that was about to "finish" on the assembly line. This put a lot of pressure on trucking companies leading up to this "model change over". Bottom line ... June was once the "big month" for the year. However, as the auto industry exported factories and purchasing managers got better tools to manage inventory and shipping, this trend has waned. There is still some "build out" transportation blip, but not like it was 20 years ago.
• July – The start of summer holidays. Again, in the past, the auto industry in North America would "shut down" for a few weeks to "retool" the plants for the next model year. However, the auto industry has made great strides in reducing this downtime window. So we have seen a lower impact of the July "plant retooling" slowdown. July, however, is still a slow month due to many holidays and lower shipping volume.
• August – Things typically start to pick up as families come off their vacation, back-to-school requirements take supplies off the store shelves, and North America gets back to work.
• September – Another fiscal quarter end. In the past, inventories for Christmas season begin to ship at this time. But Amazon has changed a lot of that. Instead of Manufacturer-Distributor-Retailer-Consumer, we now have more Manufacturer-Amazon-Consumer. Still, September is typically a strong month.
• October – The start of a fiscal quarter (like January, April and July). It will usually start strong for a few days (carry over from September) and then trucking executives wonder "what happened to our nice freight rally?" It hasn't gone away, it just goes dormant for a few weeks like most "start of quarter" months.
• November – The start of the Christmas rush. November would be a very good month if it wasn't for the holidays. November is normally a decent month for expedite business.
• December – Christmas crunch time ... and end of a fiscal quarter ... and end of a fiscal year. So shippers want to get as much done before Christmas arrives to book revenue for the quarter/half/year and make their bonuses. December is usually good for expedite freight for the first two to three weeks. But as Christmas approaches, people start taking vacation time and plants and offices operate with reduced staffing. If your drivers have had a good year, they start "booking off" which reduces your own capacity to serve your customers. By December 23rd (or sometimes earlier), the order board becomes very light and your driver pool depleted. It's time to be with your family for the next 10 days.

Until next time ... it just keeps getting better ... and the best is yet to come!

Stuart Sutton, President and CEO
Full Circle TMS

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Full Circle TMS is transportation software that helps grow your business, maximize productivity and improve profitability by not only automating all your operational and financial activity, but also by tightly integrating you with all your key trading partners.

This scalable, web-based system meets your needs, whether you're a two-person operation or a billion-dollar transportation company. Full Circle TMS® comes in five different versions so you can choose the one that best fits your business size and model.

For more information go to www.fullcircletms.com