Diversify your customers and optimize yield. This winning combination for trucking and brokerage operations was explained during a 30-minute Fleet Owner webchat on Aug. 24, “How to Profitably Grow Your Fleet in a Recession,” by Magnus Technologies CEO and Founder, Matt Cartwright, and Solutions Engineering Manager, Verlen Larsen.

Below are some highlights that companies of all sizes can put into practice to outperform the competition.

Diversification Is “Absolutely Critical”

During a hot freight market, carriers and freight brokers have ample opportunities to grow with certain customers or within industry sectors. A focused growth strategy can backfire when markets shift, which is why companies must constantly evaluate their book of business to avoid being trapped. 

“Everything always changes. A base of diversified customers gives you more ways to recover [in a recession],” said Cartwright. “If one market suffers more than others, that affects your freight business, too, but if you have other markets in your customer portfolio, your chances are better.” 

Larsen cited a number of reasons why it’s absolutely critical to have business diversification. “It's going to help your driver base. it's going to help your asset utilization. It’s key to most people's success. Look at big companies. It's not because they have only one thing that they do great. Things do change. So I think that's super critical to freight carriers across the board to make sure they've got a strong, diverse customer base.”

Willingness to Embrace Change Opens New Doors

Cartwright gave an example of diversifying under pressure in the finished vehicle logistics area. He spoke of customers using the Magnus TMS platform who faced severe supply chain issues.

“They started to look at what else they do with assets. They were willing to try something different to survive, and some of these clients have gone into other areas like brokerage and the truckload side. Some on the truckload side have started to think about owner operators. You need that diversity inside your organization, but then also by its nature, that creates the opportunity for more diversity in your clients. So when one is down, maybe the other two or three are up.”

Nimble Operations Platform Necessary to Grow Diversification

One way technology can assist transportation companies during a downturn is to speed the process of identifying business opportunities and onboarding new customers.

“No matter what markets do, expand your customers,” Cartwright stressed. “If one is slow, go to the others. Also look at your process and operations in that context. Can you onboard those customers quickly? And are you easy to do business with? Do you have a nimble operations platform that allows you to respond and adjust, optimize and analyze?” 

A flexible, modern TMS platform can help freight operators organize and break into new markets more easily. “You need solutions that process work quickly, accurately and reliably, so you make decisions based on data,” explained Cartwright. Having a strong process and a strong platform to launch diversification makes that change easier. 

Scale Growth to Avoid Overhead

Cartwright and Larsen shared many practical ideas to become more nimble and profitable, but they also pointed out a “false promise” that freight managers should avoid. 

“The first thing a lot of minds go to in this industry is thinking that one way to add to our bottom line is to increase overhead – that is, more trucks, more drivers, whatever the case,” said Larsen. “When freight is at $5 to $8 a mile, that can trip you up a little when it comes to capacity. Because what does an up market always do? It always goes down, and when it does, that overhead is still there, along with the costs to maintain it.”

Focus on What You Can Control

Growing capacity by improving processes and using data to work smarter will keep overhead down, enabling companies to remain profitable when freight rates soften.

The best advice they have for fleet operators in a downturn is to focus on:

• Your asset and customer base
• The technology you use
• Your processes to accelerate cash flow

Watch Full Webchat for More Strategy Tips

This is just a portion of what’s covered in the full 30-minute webchat, sponsored by Magnus Technologies. Watch to find out what freight technology experts have to say about other trending topics, such as:

• Optimizing your asset mix and key metrics for rapid decisioning
• Embracing change and fostering a technology-friendly culture
• Being more nimble to increase load margins and service levels
• Increasing cash flow by accelerating invoicing and receivables workflow

With the right strategies and technologies, fleets can handle a freight recession and most other roadblocks. Watch the webchat -- “How to Profitably Grow Your Fleet in a Recession” -- and learn strategies to carry you through rough times.

To discover more about strategies about investing in technology to survive inflation, download our new guide: “Digital Deflation: Fighting Inflation with Next-Gen TMS Investments.”