Why Adding 3PLs Can Backfire on Shippers

Managed transportation isn’t one thing — and misunderstanding it can cost shippers money. John Conrad of Evans Transportation Services breaks down what managed transportation actually means, where AI helps (and where it’s oversold), and why using too many 3PLs can drive rates up instead of down. If you manage freight, routing guides or brokerage partners, this is the part you need to hear. #ManagedTransportation #3PL #Freight

Shippers who spread freight across multiple third-party logistics providers in pursuit of lower rates may be getting the opposite result, according to John Conrad, Chief Revenue Officer at Evans Transportation Services. When too many 3PLs chase the same lane simultaneously, carriers recognize the bidding competition and delay accepting loads, ultimately extracting higher rates — a dynamic Conrad calls “broker poker.”

“Those brokers who are going out to the marketplace over and over and over again on the same lane, they’re driving the rate up because the carriers get smart and they say, I’m going to wait for a little while because you guys are all bidding on it,” Conrad said. “And at the end of the day, I’m going to be able to get a little bit higher rate if I wait.”

“Sometimes what can happen is when you flood the marketplace with too many bidders and too many 3PLs, you can actually do the opposite of what you’re intending to do.”

Conrad said there are legitimate cases for using more than one 3PL, but the bar should be a pre-existing, trusted relationship in a specific segment of a shipper’s business — not rate arbitrage. Evans itself retains other 3PLs within its managed transportation solutions when a shipper already has a vetted partner on a given segment, rather than displacing relationships built over years or decades.

On the broader freight market, Conrad offered a cautious outlook for shippers. He noted that even during a brief period when fuel prices appeared to be falling, average per-mile rates did not drop alongside them — and when fuel rebounded, rates began climbing again. He pointed to Gulf Coast markets around Houston and Louisiana, where load-to-truck ratios have reached “hundreds and hundreds of loads to one truck,” as a pressure point that an approaching tropical storm could worsen further by driving fuel costs and spot rates higher still.

Conrad also flagged the open-equipment and heavy-haul segment as the most volatile mode in the current market, outpacing dry van and LTL in unpredictability. He attributed much of that volatility to AI data center construction, agreeing that large equipment orders arriving in batches absorb available capacity in concentrated bursts — and said that demand is unlikely to slow as long as consumers and businesses continue requiring faster data processing.

Evans Transportation, a privately held, family-owned company founded in 1985, serves roughly 300 customers and holds an MC number beginning with 1, reflecting its status as one of the earliest licensed 3PLs following trucking deregulation. Conrad described the firm’s approach to managed transportation as “outsourcing done right,” combining proprietary technology with off-the-shelf tools and, most recently, an agentic AI voice system to handle initial inbound call volume before routing inquiries to live staff.

• Flooding a lane with multiple competing 3PLs can cause carriers to hold out for higher rates, backfiring on shippers seeking savings.
• Gulf Coast load-to-truck ratios have hit hundreds of loads per truck, and a tropical storm threat risks pushing fuel costs and spot rates even higher.
• Heavy haul and open equipment is the most volatile freight mode right now, driven largely by AI data center construction absorbing capacity in large batches.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.