Prior to the recession, which saw many shippers focus with great intensity on reducing the price of their transportation purchases, there was a great deal of talk about closer and more integrated rela...
Prior to the recession, which saw many shippers focus with great intensity on reducing the price of their transportation purchases, there was a great deal of talk about closer and more integrated relationships with all modes. However, the one thing that has held constant through good financial times and bad is the average length of transportation service contracts shippers are willing to sign. The vast majority of shippers (approximately 75% to 80%) are using a contract period of one year or less for each mode, according to our most recent Transportation Buying Trends research, conducted in partnership with CITT and CITA. And, interestingly enough, that’s not much different from the way things were before the recession, which raises the question whether closer and more integrated relationships can truly be forged through one-year contracts. There is strong anecdotal evidence that both shippers and carriers prefer to keep it that way for now -shippers are looking for deals in the depressed economic environment and carriers don’t want to be locked into a long-term contract at substandard rates. Our research also shows purchasers of TL trucking are using, on average, 28 carriers while shippers using LTL services typically use up to 13 carriers.
For more Canadian sourced data on modal preferences, rates, surcharges, shipment volumes, capacity and contracts see our annual Inside the Numbers report available for $99 through www.trucknews.com
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