What can we learn in the wake of Celadon?
In case you haven’t heard, cross-border carrier Celadon has officially filed for Chapter 11 bankruptcy today, leaving thousands of employees, drivers, and shippers in the lurch. The sudden nature of the announcement is jarring, and while multiple carriers have rushed to fill the gap and re-hire the almost 3,000 displaced truckers, hundreds of shippers are left wondering – what can I do to prevent this from happening again? And, more importantly, where the heck is my freight?
While we can’t answer the latter (unless you want to give us a call), we can answer the former with a few takeaways from this unfortunate affair.
Lesson 1: Single Asset, No Recourse
When you rely on a single asset-based provider, you’re putting all your freight eggs into one uncertain basket. Celadon’s shutdown feels unprecedented in scope and scale – but in the past year alone two other, major cross-border carriers closed their Mexico departments. Celadon is only the latest in a long line of comparable capacity disasters, particularly in the cross-border space.
Even without a full-blown shutdown, localized issues with labor disputes, weather delays, and branch closures can all trickle down directly to shippers, whose prices and deadlines suffer as a result.
To avoid feeling market fluctuations and general capacity crunches, stick with providers whose diverse networks make them more impervious to shifts in the freight landscape. If your provider has more than one carrier waiting in the wings, they’ll be able to compensate in a way single asset providers just can’t.
At this point it’s safer to assume the worst-case scenario than to rely on a best-case outcome.
Lesson 2: Have a Backup Plan
Shutdowns leave a lot of people scrambling, which means if you’re unexpectedly stuck hunting for capacity, so is literally every other link in every other supply chain.
While some shippers – particularly big-ticket Fortune 500 ones – will be able to jump the line and find new providers eager for their business, many more customers will be turned away at the door or shunted to the bottom of the priority list.
Having a backup plan, or more importantly having a provider with a backup plan, can mitigate the impact on your freight.
Is your routing guide dynamic? Is your provider’s? How many layers of carriers do you, or your provider, have? Do you have an operations team, either in-house or through your provider, that can manage a shutdown of equal, or even greater, magnitude?
These are important questions, and the answers will mean the difference between a stranded load and an on-time delivery.
Lesson 3: Quality over Quantity
Massive, national providers like Celadon certainly have their appeal. They’re a one-stop shop, they offer broad coverage, and they certainly seem like the simplest solution if you don’t want to deal with a “middleman” broker or 3PL.
However, opting for a jack of all trades means you get a provider who can only offer equally broad solutions. And as we all know, freight is hardly one size fits all.
Being able to match the best carrier to each load/lane is critical for the best possible service. A fact that becomes obvious when you’re left rebuilding your specialized supply chain from scratch. Resisting the urge to rely on consolidated national providers will not only protect you from these capacity losses, it will result in better customer service overall.
Not to mention specialized providers are an absolute necessity for specialized freight. There are just too many moving parts to leave to chance, especially when it comes to cross-border shipping, a process which involves multiple parties, customs brokerages, and languages. It’s one thing if you’re left scrambling to move a standard load, it’s a whole ‘nother ball game when you’re trying to find a customized solution at the zero hour.
Look at it this way, a neurosurgeon and a podiatrist both went to medical school, but only one should preform brain surgery.
Lesson 4: Consider Alternatives
There’s a lot we can say about the virtues of transloading (enough for another post entirely), but let’s stick with the basics for now.
Transloading is the transferal of goods from one trailer to another. For OTR shipments, it’s as simple as unloading one trailer at the border and immediately reloading another. On a normal day, transloading can save shippers a lot of time and money on their freight. During a capacity crunch, transloading can be the difference between a load delivered and a load stranded at the dock.
Transloading also opens up your network considerably by allowing any US provider to handle the US portion of any load, rather than limiting you to a small handful of door-to-door caqrriers.
Long story short, if you’re trying to recover a load at the border, transloading is the way to go.
That said there is a right and a wrong way to transload. Stick to providers whose carriers are CTPAT certified, meaning shorter wait times at the border, improved load security, and business resumption priority following a natural disaster or terrorist attack.
It’s also ideal to work with providers (like Forager!) who specialize in cross-border shipping, as they’ll have the team and resources to quickly and easily arrange transloading on short notice.
When disaster strikes, a CTPAT certified cross-border specialist will have the means to cross-dock freight same day and get it dispatched from the border in no time.
Lesson 5: Use Self-Service Options
If you need a load quoted and booked ASAP, there’s no better solution than a self-service portal. Unlike a traditional service model that’s confined to standard hours of operations and endless phone calls, a self-service shipping option is instant and flexible. Two huge benefits during unexpected circumstances.
Ask your providers if they have a booking/pricing portal, and request access immediately. Digital platforms give you the power to plan your loads wherever and whenever so you can react instantly to any setbacks or delays.
Of course, if you have any cross-border loads you need priced and booked instantly, you know SCOUT by Forager has you covered.
Lesson 6: There Are No Guarantees
Celadon, US Xpress, and Covenant were all massive cross-border carriers, yet in only one year’s time each one of them has stopped servicing Mexico. Permanently, in the case of Celadon.
Choosing big companies come with a big false sense of security, when in reality the “safe” choice isn’t nearly as safe as it seems. At the end of the day, there isn’t a single provider who is immune to hardship or failure. From the towering enterprises, to the smallest of startups, no one is too big to fail or too small to succeed.
When it comes time for you to choose a new provider, choose the one that’s best for you.
Regardless of size.
If you’re a shipper affected by the Celadon shutdown, and you need your cross-border freight covered, you can get access to SCOUT by Forager here.