Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EST. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.
Inside this edition: Money can’t fix a people problem; FMCSA announces new oversight plan; and Forward Air adds to its family.
It’s January — when budgets take effect. Those requisitions for new team members are approved, the job description is ready, and recruiters are on the case looking for some qualified candidates. As staffing shortages are expected to plague 2023, there are some key factors to consider for employee recruitment and retention. In 2020, it cost about $10,200 to hire someone. Right now, it will cost about $19,600.
In past times (pre-pandemic), it wasn’t as high of a priority to address employee retention. It has always been difficult to fill and keep supply chain positions, and if an hourly employee left, well, that’s nothing a temp agency can’t fix. Turns out now things have changed quite a bit. Hourly workers’ essential role was thrust into the spotlight during the pandemic. A quick solution was to throw money at the problem — literally. Companies were raising hourly rates and adding big sign-on bonuses.
Workers want more. Raising wages and including signing bonuses is a great short-term fix for getting people in the door, but they aren’t staying. Retention continues to be the hardest aspect. Hourly and entry-level workers aren’t just looking for better pay, although compensating people at a fair wage should remain a priority. Workers are looking for growth and a sustainable career. Forklift operators should be given a chance and path, should they want to take it, to become a warehouse manager. Office administrators need to be shown a path to executive assistant or office manager. Plans to those ends can be attained through one-on-ones, training and shadow opportunities. Those are vital to keeping people happy and engaged. You never know who might secretly be amazing at back office work until they get a chance to shadow someone. Don’t just throw money at problems hoping that fixes them.
Guess who’s at it again? The Federal Motor Carrier Safety Administration has established some new oversight for truck brokers and freight forwarders. Most brokers operate with integrity and are generally doing the right thing. But those bad ones, well, they’re the reason we can’t have nice things. The Owner-Operator Independent Drivers Association has complained to FMCSA that in 2012 raising the amount of the broker bond to a minimum of $75,000 did not stop brokers from continuing to “steal transportation services in excess of the bond amount.”
Per FreightWaves writer John Gallager’s reporting: FMCSA proposes allowing brokers or freight forwarders to meet a regulatory requirement to have “assets readily available” by maintaining trusts that meet certain criteria, including that they can be liquidated within seven calendar days of an event that triggers a payment from the trust. If a broker or freight forwarder does not replenish funds within seven business days after notice by FMCSA, the agency will issue a notification of suspension of operating authority to the broker or freight forwarder.
Basically, if you pay your carriers, you have nothing to worry about. If you don’t … 1) Seriously? 2) Be better and compensate your carriers.
TRAC Thursday. Coming out of Music City and heading south proves to be a solid move on the spot market. Currently going from Nashville, Tennessee, to Jacksonville, Florida, you’re looking at a rate per mile of $3.25 that’s holding steady. For reference, the National Truckload Index is at $2.73 and trending downward. Capacity is loosening out of Nashville, signaling that spot rates will trend downward, but they haven’t started that descent. Catch loads out of there while you can at the higher rate before everyone else catches on.
Who’s with whom? We have one of the first acquisition announcements of 2023. Forward Air is adding less-than-truckload carrier Land Air Express for $56.5 million. Forward Air is the MVP of airport-to-airport LTL moves, so adding an extra LTL carrier continues to grow the business. Forward Air is expecting to see $74 million-$94 million of annual revenue from this deal.
Quotable from Todd Maiden’s FreightWaves article: “This acquisition will accelerate the expansion of our national terminal footprint, particularly in the middle part of the United States, and we believe it will strategically position us to better meet the current and future needs of customers,” said Tom Schmitt, Forward’s chairman, president and CEO, in a news release. “We believe this acquisition will increase our capacity to provide customers with the industry leading on-time and damage-free service they demand.”
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Mary
