Saturday, July 11, 2015

Another Summer and More Fear from FTR

It is like clockwork.  I can set my watch by the articles that will be printed by the logistics' press such as FTR.  Here is the story of the "study" (it has been the same for 5 years):

  1. We thought prices would be a lot higher than they are
  2. Freight is softer than we thought
  1. Watch out, it will tighten soon
  2. Give in to the demands of your carriers as they try to get you to "pre-pay" for price increases.
  3. Those who do this will be rewarded...
And of course my response continues to be the same:  Prepaying for tight capacity is a waste of money.  Those who followed this course 3 to 5 years ago have paid a lot of money for a day that still has not arrived.  

Actually, you should follow the direction of the executives running these companies:  They essentially say when capacity is tight, rates go up and when capacity is loose rates go down. That is the ultimate definition of a commodity.  So,  therefore, treat it that way.  

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