Month: July 2015

The transportation industry is a very important part of the US economy as it accounts for about 10% of the U.S. Gross Domestic Product (GDP), or $1.6 trillion in revenue. The industry employs millions of workers, moves products, generates revenue; and maybe most importantly, it allows business continuity. Without transportation the economy would come to a halt. The transportation industry is a good indicator of the strength of the economy as it is the nucleus to the transportation of all products and services.

The transportation segment is the heartbeat that keeps the body functioning in today’s global economy. Transportation links together the factors of production in a complex relationship between producers and consumers. Transportation needs are constantly changing much like other industry demands; businesses are constantly looking for ways to streamline their shipping needs as transportation expenses have continued to rise with the increase in fuel and driver shortage. Transportation also impacts the pricing for industry products. A good example of the pricing increase is the recent increases to the price of food. As transportation expenses, like fuel, increase, there will be a direct impact on the price of the product shipped.

Industry demands have a direct correlation with the supply and demand of transportation. While LTL rates are relatively stable over a period of time, Truckload rates change like stock prices. One Truckload example is the seasonality of produce: spring and summer are the peak times for produce and places like Florida and California are hotbeds in the produce season. Carriers provide very attractive rates to cover loads into these markets when produce season is in full swing. Conversely, when produce isn’t an available commodity the demand is low and shipping rates can increase dramatically into these markets. The best way to describe the ebb and flow of pricing is that the shipping rates change based upon the supply and demand of shipping needs within any given market. Carriers typically price a shipment based upon the outbound opportunity of moving their next shipment from the current shipment’s destination.

In summary, while the economy and industry will always change, transportation needs will always be in demand and will continue to adapt to support business needs.

Matt Watson, Truckload Sales Support Manager

 

My name is Mark Campbell and I am proud to be the Accounting Manager here at Priority1, Inc.

I have worked for a number of companies since graduating from college over thirty years ago and I can honestly say that I have never worked for a company that pays its vendors and carriers as quickly as we do here at Priority1.  I attribute this to three reasons:  First of all, it is the right thing to do (see a previous blog by Troy Lampley our Financial Assurance Manager on Business Ethics). This is a motto that we work to live up to every day.  Secondly, having stability and financial strength allows us the ability to pay our vendors and carriers lightening fast. It’s very interesting to me to see one of our telephone bills come in where this particular vendor has given us thirty day terms.  In previous positions with other companies, it has always been those particular companies’ policy to pay on time, but to pay as late as possible. When that bill arrives in the mail, it is immediately approved and placed in our accounts payable system and payment is processed the next day that payments are mailed, which is typically each Friday. The same procedure holds true with all of our vendor and carrier invoices.  We have a great team of employees, and believe me, it takes a team effort to process the volume of invoices that we receive each week and to pay these in such a timely fashion.  We don’t have to wait for our customers to pay us before we can pay our vendors and carriers – From my experience, it is very common in a lot of industries to delay payment and this applies to the transportation industry in particular. And finally, we know that paying our vendors and carriers as quickly as possible will help them to be more successful as cash flow, or the lack there of, is the number one reason that businesses fail in today’s business economy.  Just like saving our customers on their freight costs helps them to be more profitable and successful; paying our vendors and carriers as fast as we do helps them to be more successful and will only add to the long term business relationships that we strive to have with all our partners.

Consider doing business with Priority1 if you are looking for a company to partner with that has the stability and financial strength to pay you as quick, or quicker than any other company in the industry. We do all this because we want all of our partners to be successful, long term, and because paying you quickly is simply the right thing to do.

Mark Campbell, Accounting Manager