DC Velocity - March 2018

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in the 3 to 8 percent range. Asked
how he does it, Cubitt joked that it’s
“that crazy lane magic.”
Hardly. Transplace analyzed each
lane to determine price anomalies
among the various carriers. Often,
there is one carrier that underbids
the rest because the specific lane
may be a better fit for its network,
according to Cubitt. None of the
competing carriers know how each
is bidding, Cubitt said. Even though
carriers utilize more sophisticated
technology than ever before to sup-
port their bids, “carrier pricing is
not that scientific,” he said.

Cubitt recommends that Transplace’s customers put all their lanes out for bid each year and focus on eight or so core carriers. This gives shippers more leverage and efficiency than if they had to manage 25 or so separate negotiations with multiple providers, he said.

At the same time, however, Transplace will not hesitate to replace an incumbent carrier—even though its shippers place a high value on incumbents—if a reputable alternative comes in with a meaningfully lower bid, he said.

THERE’S INEFFICIENCY SOME WHERE

Cubitt’s comments underscore the notion that, in what by all accounts is a brutally tight market for truck capacity, there are still many inefficiencies that can be discovered and exploited. Good intermediaries can leverage capacity availability in ways that even large shippers can’t on their own, brokers say. The key, according to Jeff Tucker, who runs Tucker Company Worldwide Inc., a family-owned broker and 3PL based in Haddonfield, N.J., is for shippers to stop thinking of brokers as a fallback mechanism and instead to “stand shoulder-to-shoulder with us” as partners. Shippers that have the volume and, perhaps more important, the culture to work strategically with intermediaries can “scale up their capacity” in ways they may never have thought possible, Tucker said.

Tucker said his company’s business is split 50-50 between contracts and transactions conducted on the spot market. Tucker’s contract portion is around twice the level held by a typical broker. Jeff Tucker said his company deals primarily with larger fleets that are more inclined than smaller fleets or owner-operators to work with brokers in contractual relationships.

Tucker is hell-bent on steering his firm toward more contract work. “It is my sole mission in life in 2018” to get more shipper business under contract, he said in a phone interview.