Freight demand has noticeably declined. For many seasoned operators, it seems to be a case of those notorious ‘J’ months – January, June, and July – which always prove to be the most challenging times of the year to keep the wheels turning at a reasonable rate.
It doesn’t matter which operator I’ve spoken to in the past month – everyone seems to have experienced a ratcheting of the handbrake during May, with a marked reduction in volumes.
Arguably, much of what’s occurring is a combination of unrelated events combined with the reality that many of us have simply traded better in the past three years than we’d initially envisaged. Whether current events are a reset or recalibration, there’s no denying that a slowdown always feels like a jolt and leads to a little soul-searching; how could I have been better equipped to see this coming? If you delve a little deeper into the current situation, I think it’s fair to say that few people in the world anticipated a widespread global pandemic – or, more recently, extreme weather events – to have been prepared for it beyond the limits of basic financial practice.
Coincidentally, but in hindsight, I’ve invested a considerable amount of time during the past 12 months schooling myself on the art of integrated financial forecasting and getting to grips with tools that enable an enhanced ability to predict the future, or at least model how different sets of predictions might play out. While I’ve been reasonably partial to the likes of a dynamic Excel rolling budget/forecast, it’s only since I’ve properly immersed myself in web-based forecasting tools that a few lightbulbs have gone off. They’ve created an opportunity to seriously critique the fundamentals of a given transport operation and the links between revenue drivers and expenses.
Most of my time has been spent operating within Fathom (fathomhq.com) and DryRun (dryrun.com), but you can find a host of similar integrated tools by googling “integrated forecasting tool”.
I’ve seen that if tools like this were valuable before the headwinds arrived, their value has now compounded exponentially. I take the view that even if the near term looks a tad grim, isn’t it better to know how grim and plan accordingly? Or, conversely, maybe things don’t shape up so badly after all and you’re sitting there dreading a scenario that is vastly better in reality.
Beyond the comfort these tools provide, making an effort to use them gives funders confidence; they can see the lengths you’ve gone to understand your business’ outlook and get a clear picture of what drives it. One of the most significant benefits of integrated forecasting tools is how easily various scenarios can be overlaid on an existing forecast to sense-check how adding plant, personnel or opportunity might affect the entire operation. And the data is achievable within minutes.
But perhaps the greatest advantage of such tools (the bulk of which can be had for $50-$100 per month and integrate easily with most accounting/ ERP platforms) is how they make you think outside the square. Too often, we focus on cost reduction/elimination as our primary tool to combat challenging times, but a forecasting tool can help you look at things from a different angle and assess the impact that growth by acquisition or diversification might deliver.
The chances are that if you’re feeling the pinch, there are customers upstream in the same boat who may just be open to a little creativity in their transport offering they wouldn’t have thought quite so palatable six or 12 months ago. Now you have the power in your hands (via a few mouse clicks and keystrokes) to show them and you a different future.
Happy forecasting!
