FTR, a transportation forecasting firm, believes that shipping rates will increase soon as available capacity will be negatively impacted by economic conditions while a new regulatory drag will affect the trucking industry in 2017. The firm predicts that current wave of new regulations will last at least through 2019, which could see the Shippers Conditions Index drop to new lows.
Source: Material handling and logistics, November 6, 2016.
‘Shippers are still able to take advantage of a moderately loose trucking environment,’ notes Jonathan Starks, COO at FTR, ‘largely due to the continued weakness in economic and freight conditions, especially in manufacturing and mining. In addition, shippers continue to benefit from the fuel environment, which has remained subdued, helping maintain cost reductions.’
INSIGHTS: Animal health fulfillment has long offered free shipping. The variable cost is frequently not supported by the relative size of individual orders or per box revenue. Even Amazon is realizing shipping cost increases that outpace revenue gains. Manufacturer and distributor representatives need to work with purchasing and replenishment personnel at clinics and retail locations to secure efficient and cost-effective orders. There is no need for a two doctor practice to place one or more orders every day. Those costs end up being absorbed in price increases across all customer orders.