MIT CTL's Angela Acocella, Chris Caplice, and Yossi Sheffi's recent research offers a fresh look at how shippers, carriers and market dynamics play into freight contract performance.
One big takeaway from the research was that 3PLs were better able to handle operationally difficult transportation demand than asset-based providers. Part of this came from the dataset, which included the pandemic-inspired freight demand spike. That datasheet showed that despite carriers and shippers having a long relationship, “we do find that market condition impacts relational factors: during a tightly constrained market when the outside financial option is high, suppliers are pulled from customers with which they have long-term relationships.” To put it more simply, market forces like short-term demand surges in the spot market that spike rates there can pull a carrier away from contracted relationships, making the rate “worth less than the paper it’s printed on” to steal Chicago commodities trader parlance.