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How To Keep Freight Moving With Sustainable Margins in H2

Many transportation and logistics providers went into survival mode in Q2, yet despite a global pandemic, freight continued to move. A majority of companies were forced to get many, sometimes hundreds – of office-based employees prepared for remote work in a matter of days, and leaned on fast-track initiatives focused on adapting their operations to become leaner, more agile, and more efficient. 

FreightWaves Market Analyst Zach Strickland sat down with DDC’s own Chad Crotty for insight into the surging volumes hitting the roads and to learn what LTL carriers should do to effectively accommodate and maximize the benefits of the upward-trending market.


Business continuity and  recovery planning are essential to minimize disruption, safeguard data and ensure the safety of everyone involved in order to overcome the pandemic with minimal damage to operations. These will also collectively drive the wedge to separate businesses that survive with sustainable margins, and those whose financial performance will barely get them through the holiday season.

The following will also help companies better mitigate future challenges that lie ahead:

  • Conduct and revisit SWOT analyses with a regular cadence. They are likely to evolve over time. Conduct market research to learn what actions your competitors are making, and what benefits they are advertising to your customer base.

  • Document  every operational change that has taken place over the last few months. Store this information in an easily accessible location for future use and quick reference as needed. Any back office enhancement implemented on the fly needs to recorded for further review and possible standardization.

  • Review and amend procedures as needed, and document any future variations of business plans. The IT gap in transportation continues to widen despite the pandemic. Don't give complacency a chance to get comfortable.

  • Effectively communicate policy and operational changes with team members to ensure all safety and operational protocols are being upheld and executed. Tip: Bring the staff along with you on this journey. Show how vital their role in this process is to your company's success.

  • Train staff members on new initiatives and conduct exercises to ensure they understand what’s expected of them if a worst-case scenario were to happen. Be open and available to answer questions, address concerns and provide clarity. Let them leave the uncertainty of 2020 at the door (of their home office).

  • Consider extending stop-gap policies initially deployed as temporary resolutions, like working from home, into more permanent workforce planning strategies for business longevity 

Additionally, to protect cash balances from the growing list of retailers filing for bankruptcy, Crotty advises LTL carriers to closely manage receivables and tighten credit terms. Many carriers who normally allow between 45 to 90 days to pay outstanding freight bills are now tightening their credit terms to 30 days.  

This is a trend we will see emerge as perhaps a new standard across all modes, worldwide. For example, Nelson Sequeira, Singapore-based senior director at X-Press Feeders, recently told Journal of Commerce, “Yes, we are tightening our credit terms especially for small or proprietorship type of set ups and are also requesting cash up front terms in some cases. NVOs are likely to come under pressure and some might disappear from the scene.” 

No one has a playbook for how to navigate through a global pandemic, but contingency planning and a tighter grip on receivables and credit terms is crucial to safeguarding profitability and liquidity as the economy continues to attempt recovery before January. 

Download DDC’s exclusive report, Adapting to a Pandemic: Freight Market Budget and Priority Shifts, to learn what key initiatives are taking priority and how they’re impacting the transportation and logistics forecast for H2 and into 2021.

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