The Challenges We Face Together
This month’s issue of 3PL Perspectives focuses on the challenges we face together as an industry. I am sure if we were all polled about challenges our businesses face there would be a variety of answers, but there will also be the same core challenges we are all facing. Some of these challenges can be tackled together and others are specific to your business model.
As an industry, I keep hearing that people are worried about fraud and the economy. The million-dollar question on everyone’s mind is when will the freight market truly rebound? We have been on a roller coaster ride over the last four years. We were giddy with freight and overexuberance from 2020 into 2022. More carriers formed during this time, and we saw 31,000 brokers, a 35 percent increase over 2019. And then the bonanza came back down to earth, and the number of carriers and brokers fell sharply, where now we are down to 27,450 – a 10 percent decrease over 2023. This market “right-sizing” is painful. Regardless of whether it makes sense to have less excess capacity in the marketplace, these closures hurt people.
The good news is we are seeing “green shoots” of growth. The flatbed marketplace is picking up. Our industry watchers and participants are still bullish on this industry. Inflation is falling. Jobs numbers continue to look good. And we have proven our utility during the worst of the supply chain dysfunction, and our customers have not forgotten that. And we continue to innovate using technology. Our world is ever evolving – we have seen a lot of positives and we have experienced several challenges. The past four years have shown that the global supply chain is prone to disruption but also innovation.
Costs, from raw materials to labor, are still high. And black swan events like the Key Bridge catastrophe, two wars, drought in the Panama Canal and Red Sea piracy still test the resiliency of the supply chain. But we need to remember that the supply chain has faced a lot of adversity over the past two years, and it still continues to rebound, improve and adapt. I am beginning to feel like the $343 billion engine that could. If there is any word to describe this industry it is definitely resilient.
Fraud is also another concern for the industry. Not only does it tax your time, your people and your resources, but it also hits your reputation. The 3PL industry is so much bigger than fraud; we are at the center of the supply chain, and we have the unique ability to make transportation more efficient and more visible. We will not let the bad actors defeat us. To help combat fraud, TIA has stood up a Fraud Taskforce. The Taskforce is working hard to educate our members on the types of fraud, how to combat fraud and what to do if you are a victim of fraud.
Our Fraud Task Force has focused on educating our members through fraud frameworks (you will see on page 8 an excerpt of the recently updated framework.), working with key partners on best practices, and developing a fraud data collection effort to put our arms around just how much time and money our members have spent combating fraud. We had 500 members sign up to fill out the survey so we are hoping for strong data that law enforcement, the FMCSA and Congress can’t ignore and will help us finally tackle this issue. Also, TIA’s Government Affairs team has petitioned the FMCSA to enforce their existing authority to prevent fraudulent registrations; we have petitioned the FMCSA to enforce a broker education requirement that has been untouched since 2012, and we have made countless suggestions on how the FMCSA could help us. Our team is currently working with Congressional members on a bill that will help us combat fraud on a national level.
So how can we combat fraud together? First, if you have not filled out the TIA Quarterly Fraud Survey, please do! If you would like to participate in the survey, email Melanie Hinton at hinton@tianet.org. Second, talk with your local and regional law enforcement agencies, educate them on the size and scope of the issue to your business. Third, get to know your Congressional delegation. Tell your representative and senators about your business, how fraud affects it and how you need help combatting fraud. Finally, make plans to attend TIA’s Policy Forum in September so you can meet with your delegation in DC. It is going to take an industry-wide effort to combat fraud.
While I could go on ad nauseum about the challenges we face, I want to point out that we are a dynamic industry that has faced many challenges in the last few years, and we are also survivors who will overcome challenges and become stronger in the end.
So, what keeps you up at night? How can TIA help you with the challenges you face? Drop me a line at reinke@tianet.org and share your thoughts.
As always, I thank you for your membership and your efforts to continue making this industry an amazing place to work.
