Yellow Corp.’s tumultuous exit from the LTL market creates yet another shift for shippers already weathering the many supply chain disruptions of recent years. The good news is that recession fears plaguing the economy have created excess capacity, making Yellow Corp.’s operational shutdown less of a disruption.
Still, shippers must rethink carrier collaboration strategies and bolster adaptability. One thing is certain: the shipping industry is bracing for change. Carrier solutions will shape this transformation. Technology-driven selection strategies that are adaptive to volatility—whether due to pandemics, wars, strikes, worker shortages, or bankruptcy—will be crucial for shippers to explore.
Yellow Corp.’s loss means higher rates for shippers
Years of financial struggles and union battles are at the center of Yellow’s demise. Competitors will pick up only slight LTL market share increases amid the fallout, but for shippers who depend on LTL carriers, higher rates loom. Yellow had the cheapest rates in the LTL market. Existing LTL carriers with pricing power will most likely boost contract rates and make them stick.
Competitive rates start with carrier collaboration
Disruptions that affect rates necessitate shipper adaptability—and fostering diverse networks across the supply chain is vital to addressing this challenge. A collaborative approach to carrier networks gives shippers access to a pool of trusted partners they can call on when faced with a multitude of challenges, as well as fair and competitive rates based on market conditions and the value they bring to the negotiation.
Transportation management systems (TMSs) usher in the power of collaborative networks with quality carrier relationships. CTSI-Global’s Honeybee TMS provides access to a network of over 20,000 vetted carriers, making it easier for shippers to manage large volumes and develop solid long-term partnerships. Honeybee TMS continuously selects the optimal carrier for each shipment and helps shippers create new routing guides that identify the right carriers for each lane or region.
For example, CTSI-Global can leverage captured data to understand where each shipper currently uses Yellow. Expert advisors can make carrier replacement recommendations and use proprietary modeling applications to determine the potential cost impacts of switching to another carrier.
Data-driven accountability is the solution
Beyond fostering a collaborative supply chain, shippers must forge stronger carrier relationships grounded by accountability. An essential aspect of this effort is the effective use of logistics technology to gain visibility and efficiently manage capacity.
A robust system like Honeybee TMS offers comprehensive data on a carrier’s operations, enabling shippers to manage claims while maintaining high-quality service. Shippers can leverage real-time data to build more accountable working relationships with carriers, encouraging better service and increased savings.
Ongoing shifts and challenges in the transportation industry, like Yellow Corp.’s operational closure, require innovative solutions and a united approach. By adapting to the changing landscape and fostering strong partnerships, the transportation industry can thrive and overcome even the most significant setbacks.
Adaptability starts with strategy. Contact CTSI-Global to see how you can strengthen your carrier networks and build a more resilient supply chain.
