I interviewed Peter Katai who discussed Capacity Constraints as it Pertains to Brokers.
Today we'll be speaking with Peter Katai, and the topic is capacity constraints and how it pertains to brokers in this industry of brokerage. Peter, can you first provide a brief background of yourself?
Yes, sure.I started and manage a 45-million-dollar operation.We're part of a $375 millionr middle market freight brokerage headquartered out of Montreal, Quebec. We have ten offices in the U.S. and Canada.
First question is, What are capacity constraints, pertaining to your industry?
Currently, we're having capacity constrains in and around the areas of Texas and Florida strictly due to what's been happening with hurricanes in those areas, as well as -- there's been an uptick in volume in going into the third and fourth quarter after Labor Day. We're going into Christmas season; in terms of shipping.It's going to be pretty busy up until, I would say, the middle of December.
As of right now, due to the fact we have two hurricanes that hit two major states of the country, plus we're in the middle of the busy season, it's adding to a lot of uptick in volume, as well as pricing -- it's being driven up, as well, due to either fuel in the marketplace.
How do you address these constraints effectively?
We're just communicating back to the client on what's been happening with pricing, as well as, maybe, even moving some things around and giving more -- We've been asking for more leeway, either with their product, or potentially, more lead time with their products, if possible.
Do you have any success stories you could share, or examples of how things are done?
Sure. Technically, what's been happening with certain customers -- We have a truck parts customer that were shipping product out of either Arkansas or Tennessee, some of those areas, and Tennessee and the Southeast was hit by hurricane Irma. But what's been happening is we've been able to do some capacity constraints, and we've been able to push some of that pricing back out of the customer.The customers agreed to move the product.
They understand that these are exceptions to the rule and not normal. So what we've been able to do, is we've been able to deadhead trucks into certain areas in order to get their product in order to make sure it's been delivered on time.
Do you have any final recommendations on how to deal with capacity constraints?
Not really. The more lead time and the more flexibility that your client has, the better off you're going to be. Desperate times, I would say, call for desperate measures. And in these times -- and especially with the electronical log devices and requirements that are coming on board here in the next -- They're going to go into effect at the middle of December.
We're trying to make sure the customers are informed that there will continue to be capacity constraints [unintelligible 00:03:54] they need to drive a pricing over the long-term.
Peter, for sharing today.
About Peter Katai
Senior Director of Branch Operations at FLS Transportation Services, Inc