An Interview with Scarbrough Leadership
Matt Wilcox
Vice President & Managing Director
Scarbrough Transportation
Challenges continue for the transportation industry through Q4 and into the new year. There have been several major bankruptcies within the domestic transportation industry. The overall sentiment is that domestic transportation will not see a meaningful recovery until late 2024. Carriers must bid more aggressively, which often leads to more downward pressure on rates. This will continue to impact carriers and/or brokers who lack the resources; Scarbrough is well-positioned to weather this storm.
Heading into 2024, there are mixed forecasts and opinions for the year. We expect to see much of the same tumult in Q1, with spot rates and demand remaining flat. Shippers will be actively pushing truckload and LTL RFPs to capture low rates.
At Scarbrough, we’re focused on client satisfaction in a few different ways. We’re providing technology to bring visibility to clients’ transportation spend. We’re providing clients with a single point of contact, to solidify the relationship and help streamline communication.
What truly sets us apart is our service. As clients get to know the depth and breadth of services we offer, we continue to grow and exceed expectations. #expectmore
In recapping Q4, it has been flatter compared to Q3, but we are starting to see new business come in the door. Through conversations with operational leaders, we should see even more new business and in turn, more revenue on our books by the end of Q4 and going into Q1. This will have a direct impact on our bottom line, which is great news, as we don’t have to incur additional expenses to be able to service the new business.
When looking forward to Q1, it has historically been our slowest quarter, and we don’t anticipate anything different for 2024. That said, all efforts are on closing new business, so hopefully it will be an under promise, overdeliver kind of situation.
Our main objective going into every new quarter is to keep closing more business. We have done a good job of hiring the right people over the last few years and we have put in the time and the work into training everyone and helping them become experts. Now we have a good group of employees ready to service new business and do a stellar job at it.
Yana Brevitz
Director of Finance
The Scarbrough Group
Patrick Colligan
Senior Director, Special Projects Division
Scarbrough International
Q4 was much like Q3 in the breakbulk market. It was somewhat soft after carrying over from a lull in the summer. While SPD handled a large number of heavy machinery shipments throughout Q4 we have felt the softening as well. SPD not only handles all the breakbulk and special equipment cargo for Scarbrough, but we also handle a few niche services such as hand carries. In Q4, SPD successfully handled 198 hand carriers from all over the globe. SPD continues to meet challenges head-on. There is no project too big or small for SPD. We look forward to assisting our clients in finding solutions for their most complex cargoes.
Q1 is expected to be the start of a healthy year for breakbulk cargoes. There is optimism for growth in the breakbulk marketplace. Government stimulus packages, demand growth, and an increase in commodity prices are some of the reasons for this possible growth. Additionally, the supply of MPV/HL vessels will remain tight. These vessels handle a large proportion of breakbulk cargoes. Adding tonnage does not appear to be in the cards which will keep supply low. Another factor that comes into play is the RO/RO carriers are still extremely full. The RO/RO carriers will not chase breakbulk cargoes when they have an oversupply of vehicles and other rolling stock. Vehicles and other rolling stock tend to pay more.
The major areas projected for growth are Renewable Energy (Solar, Wind, and Hydro). Growth projections for this sector were extremely strong as high as 30%. However, due to some supply chain issues and quality issues, the growth has been downgraded. Many projects such as construction (cranes, earth movers, and heavy-duty trucks) have been stuck in the mud a bit and have not made it to market. Global construction spending is expected to rise by roughly 9%. One of the headwinds for the breakbulk market is the lack of investment by ports to handle breakbulk cargo. Many ports are investing in their container terminals. Space for breakbulk cargo is also an issue, especially on the East Coast. Finally, container and bulk operators are looking to fill up empty space on their ships with breakbulk cargo. We have seen an increase in cellular carriers spreading breakbulk across 20-30 flat racks and handling as breakbulk cargo.
The Scarbrough Group
7280 NW 87th Terrace, Suite 300 Kansas City, Missouri 64153