Last week, I had a discussion with one of our independent freight agents about unexpected fluctuations in his business. This particular freight agent specializes in moving fresh poultry across the country directly from farms. He was telling me that his business had slowed to a crawl due to the bird flu that wiped out nearly 48 million birds in the Midwest. Farms are only just now beginning to recover from the outbreak. Needless to say, it has been a difficult summer for everyone involved in the business of poultry. Our discussion was centered around what strategies this particular freight agent could implement while adapting to fluctuations in his freight brokerage business.
1. Stay on top of industry news – It sounds obvious, but staying on top of news related to your customers and the types of commodities you ship is critical in being able to adapt to changing conditions. The best ways to do this: Follow your customers on social media – facebook, twitter, LinedIn. Visit their blogs. Subscribe to trade publications. Subscribe to Google Alerts, which is a service that sends you alerts the moment news comes out about keywords that you define. In doing this, you’ll have a better perspective of changing market conditions that affect your business.
2. Diversify Your Customer Base – Perhaps this should be a preventative measure. We have talked previously about the benefits of carving a niche for your business. However, it is also imperative that you have a continuity plan for your business. This involves branching out into other sectors of business. As an example, our agent who is having a dry spell in his poultry business may be able to diversify by hauling beef or produce – other products found on farm with similar temperature and delivery-time requirements.
3. Be a problem solver for your customer – This can present itself in many ways. Perhaps one example is offering services at a discounted rate to help your customer get back on their feet. Perhaps another way is to offer expedited service by using team drivers to get raw materials to your customer in order to fast-track their production process. Finding ways to be of service to your customer, even for free or at a discounted rate during a downturn in their business will go a long way in building trust and strengthening your relationship with your customer.
4. Build Cash Reserves – This is important in any business, but the freight business especially. RFX sets aside reserves for a myriad of reasons. By allocating funds for emergencies, you are effectively putting yourself in a better position to weather difficult storms and keep your freight broker business afloat.
Having a contingency plan so that your business can still function during unforeseen disruptions is a critical element of any business. It especially holds true for the transportation; an industry constantly at the mercy of weather, infrastructure, capacity and the economy.