F3: Future of Freight Festival 2023 Recap

At F3, if 'oversupply' were a bet, you'd leave with pockets as full as a loaded freight container. 

This November, the Chattanooga Convention Center didn't just buzz; it roared with discussions of market dynamics that had everyone from seasoned pros to newcomers perking up their ears. The Future of Freight Festival, set in the heart of Freight Alley, became a junction for the global freight community to dissect and debate the industry's hottest topics.

It wasn't the "Please Advise" hats or the splash of Hawaiian shirts that caught the eye—it was the enthusiasm for what's on the horizon for supply chains, the strategies for navigating unpredictable markets, and the emerging technologies set to redefine how we think about logistics.

Shippers' Perspective on Efficiency

In a conference rich with insights from brokers, carriers, and tech innovators, Sabrina Carr, the Director of Global Transportation at the Clorox Company, stood out by bringing the vital shipper's perspective into focus.

She zeroed in on three key metrics that she believes are crucial for supply chain efficiency: on-time pick-up, cost, and truckload utilization.

Sabrina highlighted the importance of on-time pick-up, explaining that being late can mess up a shipper’s operation. It’s a common problem that often leads to a blame game between shippers and carriers. Sabrina’s message was clear: better data helps us understand and solve these issues.

Regarding cost, the goal is straightforward – move goods as cheaply as possible without sacrificing quality or reliability.

Sabrina then delved into the critical measure of truckload utilization, underscoring the industry's drive towards maximal space efficiency with a simple yet potent phrase: "No one wants to pay for shipping air." This sentiment encapsulates a broader industry challenge as firms strive to optimize every aspect of transportation to combat rising costs.

Sabrina concluded with straightforward advice for those doing business with companies like hers: "Keep looking ahead. Be ready with solutions before problems arise. Those who help us think differently about our supply chain are the ones who add the most value. We're all about keeping things moving smoothly and costs in check."

Navigating Freight Markets and Bid Cycles

Josh Phelan, SVP of finance and pricing at J.B. Hunt, and Craig Fuller, CEO of FreightWaves, didn't mince words in their discussion about the current state of freight markets and bidding strategies.

Their assessment was honest – the market isn't looking great. Josh drilled into critical metrics like rejection rates and the supply/demand ratio. He pointed out that we're not seeing the carrier drop-off needed to balance out the rates. Carriers are sticking around, even with spot rates as low as $2.21 per mile, which is longer than expected.

Craig drew parallels to the 2015 recession but with a critical difference: "The rates now swing much wider. We're seeing fluctuations roughly three times what we saw back then, making today's market especially tough to navigate."

But it wasn't all doom and gloom. Josh had practical advice for navigating these choppy waters during the bid season. His strategy? Begin with a clear customer-focused approach, setting out expectations from the get-go. Then, pivot to asking the customer what they need most. This approach helps create a customized pitch that can hit the mark.

Entrepreneurial Insights for Growth

A highlight at this year's F3 was the town hall with Brad Jacobs, executive chairman for XPO, Inc. Forgoing the usual script, he opened the floor to questions, addressing everything from business scaling to personal queries about making it with a modest start.

Here are key insights from the session:

Facing Problems Head-on:

He emphasized mental resilience in entrepreneurship: "When you're building a business, facing problems is inevitable. The key is to tackle them head-on and not let them take over. It's about mindset and staying level-headed through the challenges."

The Foundation of Scaling—People:

He shared that the secret to successful scaling lies in the team: "A company grows with its people. Look for individuals who are diligent, driven, collaborative, and honest. When you trust your team, and they trust each other, you can achieve remarkable things. It’s all about nurturing the right culture."

Understanding the Nature of Freight Brokerage:

He provided an insider's perspective on the industry: "Many assume that good times will last forever, but freight is inherently unpredictable. That's exactly why freight brokerage is essential—it thrives on market volatility, and that’s where it adds value."

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Addressing Fraud in the Freight Industry

Kendra Tucker, CEO of Truckstop, delivered a session rich in analysis, tackling the pressing issue of market oversupply. She underscored a significant challenge within the freight industry: the influx of new carriers, with an unprecedented 81,000 entering the market in 2021, signaling a need for market correction.

Kendra pointed to the financial success during the early stages of the pandemic as a cushion that has allowed carriers to weather the current oversupply. This resilience has delayed the market's natural rebalancing.

Highlighting the extremes in the market, she noted the anomaly of record highs in fraud and capacity without a corresponding drop in rates. "For the market to correct the oversupply, spot rates need to lower," she explained, indicating that a gradual market correction is in motion. The correction is seen in the uptick in bankruptcies this year, which exceed those seen in 2019, suggesting a shift may be underway.

The issue of fraud, exacerbated by the oversupply, was a focal point. Kendra revealed that Truckstop has been actively combating this rise in fraudulent activity, with thousands of accounts removed to uphold market integrity. In drawing a comparison to the role of credit card companies in e-commerce, she affirmed Truckstop’s dedication to safeguarding its users against fraudulent practices.

Until Next Year 

As the buzz of F3 fades into the rearview, the conversations don't end here. From the flood of 'oversupply' chats to the deep dives into tech's role in freight, the festival was more than just a meet-up; it was a think tank in motion. Our team left inspired, with our minds brimming with insights from the best in the biz.

Whether the casual catch-ups by the coffee stand or the intense strategy sessions, this year’s F3 reminded us that we’re all in this big, sometimes chaotic, but always moving world of freight together. So, until next year, keep those wheels turning, stay nimble, and let’s keep the conversation going. Because if there’s one thing F3 has shown us, it’s that the future of freight is a road we pave together.