Surging e-commerce, demand for faster and cheaper shipping, and unrelenting demand for superior customer service are enough to make any shippers has been, but as shipping costs soar throughout 2018, shippers will be looking for ways to manage over the road modes better. Defining “better” is also a difficult task. For the purposes of objectivity, better refers to accessing more available truckload capacity, which is tightening more than ever, says the Journal of Commerce, scheduling freight with the right type of carrier that specializes in a given type of full truckload, and securing such capacity at competitive rates.
Managing existing over the road modes of transportation can feel like an insurmountable task, but a transportation management system (TMS) could be the solution. Let’s take a closer look at the problem with trying to manage over the road (OTR) modes through traditional, manual data entry and freight scheduling versus using a TMS.
Over the road modes of transit include much more than many shippers realize. Typical over the road modes include full truckload, less than truckload, and small package or partial shipping. To further complicate the process of freight scheduling, shippers must decide which LTL carrier to use, whether to purchase cargo insurance, consider the implications of shipping a package via parcel or small package considering advancing dimensional pricing models, and what exact type of full truckload would be necessary when consolidated. Specifically, full truckload includes dry van, refrigerated, step back and removable gooseneck trailers, asserts Direct Drive Logistics, as well as flatbed carriers.
That amounts to roughly 64 potential combinations for over the road transportation, and that excludes value-added services, such as ease in freight auditing or payment processing. It is easy to see why shippers experience trouble in managing over the road transit, so visibility into this mode quickly becomes murky.
In addition, regulatory reform, which is not yet passed in either house of Congress, the impending out of service deadline regarding the electronic locking devices (ELD) mandate, and the crumbling infrastructure serve to only complicate over the road freight management. However, shippers should consider how a TMS could mitigate these risks and ensure stability, regardless of how quickly rates rise.
Take a moment to consider what dedicated TMS is. It is a one-stop platform that manages all existing transportation modes. Considering the 64 potential combinations, when applied to the course of 1000 shipments, it amounts to 64,000 opportunities for error. Applied to 100 potential origins and destinations, the number of potential combinations rises to 6.4 million. There is no room for error or mistake in data entry, but a dedicated TMS relies on technology, not just human input, to ensure shippers are getting the most value from logistics.
Alex are among the top benefits realized through a dedicated TMS. Makes information presentable, identifying at-risk shipments, average freight spend, breaking down barriers to continuous improvement, and much more. Although using more carriers can significantly increase freight spend, reports Dan Goodwill of Canadian Shipper, a TMS can effectively manage multi-carrier and multi-driver relationships. In a sense, a shipper is involved with a system, not necessarily each individual carrier.
Now, imagine the back-office expenses associated with managing freight in-house. For over the road modes, personnel must be allocated to provide information to carriers, request quotes, schedule freight pickup and delivery, review information from other carriers, ensure payment intervals and terms are within reason and approved limits, and manage inbound logistics as well. A TMS can handle all these processes automatically when deployed properly.
Not every TMS is created equal. A system to request quotes and schedule freight is great, but it lacks value if developers lie down on the job. Therefore, more companies are turning to the third-party logistics providers (3PLs), like Cerasis for their TMS needs. In fact, the Cerasis Rater resides in the cloud, allowing for continuous updating and use of the latest information and freight schedules available for every order tendered. Paired with value-added services, a quality TMS can transform outbound and inbound logistics into a turnkey operation.
Deploying a 3PL is great, but deploying a 3PL-built, -managed, and -maintained TMS is even better. Working with a 3PL built strategic value and working with an outside source is integral to finding available capacity. Instead of relying on spreadsheets and in-house personnel to manage freight, simplify the process by implementing a top-quality TMS and leveraging the power of a 3PL-shipper partnership.
Cerasis is excited to announce the release of an all new, exclusive, & educational resource: “Managing Full Truckload for Today & Beyond: A Combination Of Partnerships, Technology, & Regulation” white paper!
This is a must read for those who are looking to better manage full truckload freight moves for today’s challenging climate as well as any future market forces that may impact full truckload shipping! Get a free copy of the white paper by filling out the form to the right.
The surging e-commerce market, consumer requests for faster and cheaper shipping, and unrelenting demand for superior customer service are enough to make any shippers questioning how they’ll ever reach their goals of problem free shipping at a reasonable cost. As shipping costs soar throughout 2018, shippers will be looking for ways to manage over the road modes better. Defining “better” is also a difficult task. For objectivity, better refers to accessing more available truckload capacity, which is tightening more than ever, says the Journal of Commerce, scheduling freight with the right type of carrier that specializes in a given type of full truckload, and securing such capacity at competitive rates.
In this white paper, “Managing Full Truckload for Today & Beyond: A Combination Of Partnerships, Technology, & Regulation” you learn the following key points:
Remember the pendulum of full truckload moves in all directions, and companies, shippers, and governments, like Tesla, Amazon, private marketplace sellers, and the U.S. Government, will have a renowned impact on full truckload shipping strategy.
The use of full truckload shipping is rising in popularity, resulting from its lower cost as compared to less-than-truckload (LTL) shipping. Unfortunately, the use of full truckload shipments and expenditures have hit an all-time high, reports Kate Patrick of Supply Chain Dive. These rates will have natural implications for smaller shippers seeking to lower overall transportation and freight spend, and paired with a “blurred lines between peak shipping and shopping seasons,” shippers will experience increasing trouble when trying to procure full truckload capacity.
According to the Journal of Commerce, full truckload rates are rising in demands to tight capacity, with some companies experiencing a 35-percent year-over-year rate increase. Industrywide rates rose 25 percent in January, and spot rates, rates involving full truckload shipments that do not recur, are starting to exceed contracted rates. Unfortunately, this means small and mid-sized shippers, which are already struggling to maintain profitability in logistics and shipping, will face additional struggle in attempting to procure full truckload capacity.
Decreasing capacity and increasing full truckload rates are expected to increase throughout 2018, reports Freight Waves. This is due to increased demand, stimulated by ongoing disaster recovery efforts, which could include an additional disaster relief package in the federal government and those of states affected by the past years severe hurricane season. Retailers affected by the year storms are still struggling to reopen, and when that occurs, capacity will shrink even further. As a result, spot rates will remain “super high.” Fortunately, a solution exists.
Shippers must take a more strategic approach to truckload procurement, explains CH Robinson via Supply Chain 24/7. Economic and market activity show few signs of slipping, save for a minor tumble in economic prowess earlier in February. In the past, shippers may have ignored provider complaints, attempted to time the market to take full advantage of truckloads, and engaged in relatively minimal interactions involving full truckload procurement. This strategy is ineffective, and shippers must use out-of-the-LTL-box strategies, including:
The final aspect of the solution can be difficult to grasp. If a shipper wants to very available carriers and drivers, how does it also focus on working with a specific set of carriers instead? The answer lies in outsourcing the process to procure full truckload shipping availability and capacity, and depending on the 3PL chosen, outsourcing may also include the use of the outsourced, software-as-a-service (SaaS) platform as a TMS, such as the Cerasis Rater. In fact, working with an outside entity is integral to accessing much of available capacity when trying to procure full truckload shipping. As explained by Chris Brady, 89 percent of carriers have fewer than five trucks, so expanding the number of carriers and drivers a shipper works with is tantamount to accessing 89 percent of available capacity.
In today’s market, customer service is everything. Customers will not hesitate to abandon purchases in favor of better costs and shipping options from a competitor, and shippers must have the capital available to help ensure E-commerce visitors and potential buyers make the conversion to purchase. In other words, shippers need to have the capital available to market their products correctly. As explained by Jim Joseph of Entrepreneur.com, content marketing is integral to every brand seeking to build better relationships with customers.
Depending on the type of product sold, content marketing can range from publishing a steady stream of blog posts to keeping Instagram and Facebook followers engaged with hourly, if not more frequent, updates. By lowering freight spend and learning how to procure full truckload capacity, shippers can effectively divert capital from logistics to marketing. In turn, more marketing will enable continuous growth, creating a self-propagating cycle.
Free capital can also be used for any number of other reasons, like product research, testing, development and more.
Figuring out how to procure full truckload capacity is no small task. From Amazon to local truck drivers, the full truckload capacity crunch is about to reach epic proportions. Furthermore, both UPS and FedEx have announced plans to leverage the Tax Cuts and Jobs Act to increase capacity in the coming months, reports Global Trade, but as two of the big three carriers, capacity for small and mid-size shippers is still likely to result in a crunch. Getting a handle over freight spend through access to more truckload capacity is the ultimate win-win for retailers seeking to stay competitive with the big-box retailers and Amazon.
Up next, since more shippers will be looking to create a mix of over the road mode use, the next blog will focus on how to manage such combinations proactively.
So often we hear from manufacturing companies that they are struggling to grow. The old sales and marketing methods that used to bring in predictable sales and growth don’t seem to have the same magic, and growth is harder and harder to come by every year.
If this sounds familiar, then it’s time to shake things up. The old hunt and close mindset is less and less effective for B2B industries and manufacturing. Adding salespeople of hiring reps is not the best way to grow your business with today’s Internet-enabled buyers. With the world at their fingertips, your prospects need more from you than the same tired sales and marketing strategies.
Cerasis is partnering with Top Line Results to bring manufacturers a comprehensive webinar to explore the methods and strategies that work for today’s manufacturers. Some of the topics we’ll be covering in the webinar include:
We want to share the latest thinking about growing a manufacturing or industrial business with business leaders, managers, marketing pros, and salespeople.
To create predictable revenue growth, manufacturing companies need to change their thinking about how they view buyers and this start with leaders and the people that deal with customers every day. The old formula of hiring a salesperson, going to the same trade shows, knocking on prospects doors, and cold calling no longer works to grow a manufacturing business. Buyers, and the way they find information, evaluate options, consider vendor choices, and make decisions have changed.
Has your thinking about buyers changed or is it same old same old? We hear a lot of talk about buyers changing but we have seen little evidence that manufacturing companies have changed to meet buyers where they are today. And that is why we want to share our experience with you.
Adam Robinson, Cerasis VP Marketing, successfully applied inbound principals to grow Cerasis from -x- to -y- over the past 5 years. He will share specifics from his journey about how inbound was the right way to think about growing and actions he took to position everyone at Cerasis for success.
Todd Hockenberry founded and runs Top Line Results, a consulting company that focuses on helping B2B, industrial, and manufacturing companies adopt inbound ideas and grow with modern buyers. He is the co-author of the recently published book Inbound Organization, a handbook for companies that need to understand how to build a culture that succeeds with buyers today.
You can sign up for this free webinar here and join us on Wednesday, June 20 at 11am EDT.
Full truckload shipping is generally less expensive than other over the road transportation modes. Less-than-truckload (LTL) has more stops, touch points, and risk. It takes more time to get shipments to consumers. Remember time is money, and if your product sits in the back of an LTL van for several days, your consumers will flock to your competitors. Instead of throwing in the towel, shippers can leverage full truckload shipping to ship LTL shipments in the back of a full-size van or trailer. How? Well, it goes back to knowing when to put two and two together to make four, with four being full truckload and two being an LTL shipment.
Shippers have been bartered with the topic of LTL shipping for years, including how to make better use of it, reduce freight spend and leverage technology. Unfortunately, the surrounding LTL shipping has resulted in an unusual problem; shippers are turning to LTL-exclusive shipments, which can significantly drive up freight spend. Yet, shippers should consider using a transportation consolidation program, as explained in the previous blog post, to gain better control over freight stand and stay profitable as shipping rates continue to rise.
Although LTL rates have remained more expensive than full truckload freight, full truckload rates are on the rise. As explained by the Journal of Commerce, drive and truckload rates rose 17 to 25 percent in January 2018. In addition, analysis of contract and spot market prices revealed rising rates in medium-range hauls, 450 to 550 miles driven per lane.
Surging demand for full truckload inherently implies a forthcoming greater rate hike on LTL shipments, which are regulated by the National Motor Freight Traffic Association (NMFTA). However, the NMFTA is more likely to raise average rates in response to demand, and according to multiple sources, the capacity crunch stands on the brink of becoming full-fledge transportation crisis more drivers are retiring, and the capacity is simply unavailable. Unfortunately, this is creating the perfect storm for shippers trying to stay competitive and make a profit in shipping.
Consolidation programs, also known as retailers consolidation or multi-customer consolidation, as explained by Jeff McDermott of Logistics Viewpoints, is a go-to solution for combining multiple LTL shipments or parcels into full truckloads. In other words, the freight consolidation program volume to existing shipments by combining shipments from a given shipper or multiple shippers to reduce the overall number of miles traveled had the packages been sent via LTL or parcel shipping. This is essentially Intermodal shipping, but it is important to note that freight consolidation is essential to leveraging the full potential of full truckload shipping.
The benefits of freight consolidation have a direct impact on available market capacity. Freight consolidation does more than just combined shipments; it makes shipments more attractive to drivers and carriers. As a result, shippers employing freight consolidation tactics can access available capacity was in full truckload and reduce costs. So, what is freight consolidation really mean for shippers beyond cost savings in shipping?
Take a moment to think about how freight consolidation rewards shippers. Rewards derive from the components integral to an effective freight consolidation program, which include:
The components of a freight consolidation program require systems capable of broad scalability and visibility, such as cloud-based transportation management systems (TMS). Small and mid-sized shippers can leverage the power of TMS, much like the big-box retailers, by working with third-party logistics providers (3PLs) and taking advantage of available software-as-a-service (SaaS) platforms, like the Cerasis Rater.
Full truckload shipping rates are not regulated by the NMFTA, explains PNG Logistics, and as a result, shippers have an opportunity to take advantage of lower than LTL shipping rates through freight consolidation. LTL rates are expected to continue climbing, especially if an infrastructure bill is not passed in the coming months. Therefore, shippers need to begin preparing to use freight consolidation to tap into the value of the full truckload shipping by partnering with a 3PL sooner, not later.
So, what else can a shipper do to procure full truckload in tight capacity? We’ll answer that next.
Shippers face more challenges than ever before when it comes to managing freight spend and allocation. What is going where, and if it is going to location A, what is the best way to send it? While many other questions exist, freight management in today’s world is built on the internet, speed, use of data, and staying attractive to drivers. Yes, your freight must be attractive to drivers to get the best deals, and a TMS provides an invaluable means of creating attractive freight. Of course, its additional benefits, like reduced costs and simplicity in back-office work, help too. Let’s take an in-depth stroll the use of a TMS in managing full truckload freight and how it can make full truckload your new best friend.
As explained by Dan Goodwill of Canadian Shipper, shippers face a problem with ensuring they are paying surcharges but aligned to the volume of freight shipped. Often-overlooked charges, such as accessorial charges, billing charges, and data entry, contribute to increased freight spend and management complexity.
Part of this problem derives from the increased number of types, modes, of freight managed within a single company. Modern shippers rely on a combination of less than truckload, full truckload, air, ocean, and rail modes to move products domestically and internationally. Unfortunately, shippers may be unaware of overspending on full truckload shipments, as well as all other modes, for several reasons, including:
All these indicators of overspending can be solved by implementing a robust TMS.
To take advantage of the true capacity of a TMS, a shipper must understand a few things about existing freight, explains a previous blog post. Shippers need to know the dimensions of their freight, and they should make full use of available technologies that automate the freight quote process. Requesting quotes manually will only serve to annoy drivers and carriers, and shippers are more likely to end up paying higher costs.
Essentially, frequent putting is indicative of shippers constantly shopping around for the lowest cost deal, and since the carrier is less likely to secure the actual transaction and transport such items, carriers will charge more. However, shippers using a TMS can generate quotes within the system, and carriers and drivers are virtually unaware of these transactions. Of course, carriers and drivers will be aware once the freight is scheduled within the system.
In addition, a TMS should not be a terminal-based system. In other words, the TMS deployed should make full use of cloud-computing technologies, reducing upgrading costs associated with implementing such solutions in-house. In fact, a third-party logistics provider (3PL) can help shippers take advantage of cloud-based systems when shippers have (IT). Little experience in information technology
Part of the benefits of using a TMS derived from its ability to combine both web-based bids and constraint-based bids. A TMS is like a procurement expert, allowing for the continuous benchmarking of shipping activities and giving shippers insights into freight spend. As explained by Chris Brady, shippers should seek to increase lead times and be flexible on pickup and delivery windows. To achieve these characteristics, shippers must implement adaptable solutions. Shippers must implement a scalable TMS. Furthermore, according to Jamie Wyatt of Supply Chain 24/7, cloud-based TMS allow shippers to gain real-time pricing and inventory of full truckload shipments, integrate existing supply chain management systems with an advanced TMS, identify equipment and utilization patterns, and merge shipments through the process of freight consolidation.
Using a TMS for full truckload shipments is about finding cost savings wherever possible, and since the Big-Box retailers are only growing in strength and power, small and mid -sized shippers can leverage the power of a TMS to tap into the valuable resource of full truckload shipping. For shippers who have not previously considered the possibilities of full truckload shipping or whom lack the freight volume necessary for full truckloads, freight consolidation as part of a TMS, explained in the next post, is the answer.
Poor visibility in freight allocation is a leading reason shippers experience difficulty in managing freight, and this problem is evidence of a disconnect between the person managing freight and company stakeholders. As explained by Dan Goodwill via Canadian Shipper, the problem goes much further than that, including lacking compliance management, subpar, if any, use of transportation management systems (TMS, and failure to utilize granular shipment activity data. Goodwill notes shipment data granularity and analysis are linked with better freight allocation, which means making use of the full spectrum of available shipping options, including full truckloads.
To understand the problems behind poor freight allocation, it is important to consider its literal and perceived definitions. Its denotation is the actual freight planning process, as well as planning individual pallets to make best use of available space. Space used should always include vertical space, increasing pallet height, which opens up additional capacity in all shipments, as exhibited in a previous blog post. Yet, the problem remains: shippers need to be able to fill an entire truckload.
Yesteryear, freight allocation was simpler. Shippers could hold freight at a given location until enough freight was ready for shipment. In the modern era, considering Amazon Prime’s Same-Day and Next-Day delivery options, such freight planning would be counterproductive. Consumers will shop elsewhere, explains Stacey Rudolph of Business2Community, and the same fact holds true for consumers presented with unexpected shipping costs. Specifically, up to 56 percent of consumers will abandon online order purchases if presented with a shipping charge. Unfortunately, shippers see this problem as a reason to build shipping costs directly into price points. Higher prices will also result in consumers jumping ship too.
The only solution lies in taking advantage of the most cost-effective shipping solutions available by gaining an understanding of freight allocation, including both planning and spend.
Actual freight spend includes all necessary components for pickup, cross-docking, transportation, linehaul, consumer pickup, if available, and last-mile delivery. The only portion of the shipping journey that requires smaller LTL shipping is last-mile delivery, not shipments traversing the country or continent.
Shippers should implement processes and systems that generate granular data and actionable insights from analytics. Fortunately, this solution exists within a modern TMS, the Cerasis Rater. Seeing your most profitable and costly shipping destinations and origins enables true freight allocations. In other words, you can make the best decision for the consumer, carrier, driver, and the company itself.
Vigilant shippers have an opportunity to use knowledge about destinations and origins to reduce freight spend and improve customer service. Customers see returns in the form of lower price points and potentially free or lower-cost shipping. Shippers realize benefits of freight allocation, asserts USA Trucking Services via SlideShare, including:
Inbound and outbound freight costs can make up between 10 and 11 percent of revenue for companies with less than $250 million in sales. Meanwhile, Big Box competitors and retail giants see freight spend within 3 percent of total revenue. The difference derives from the ability of companies to leverage technology and information to drive freight spend down, but how? To answer that questions, shippers must look within their operations to identify the biggest-cost shipments and destinations and re-evaluate current freight allocation procedures.
The Big Box retailers have an advantage in using full truckload almost exclusively for shipments, including all omnichannel shipping options. This requires smaller companies, those in the 10- to 11-percent rate to vary shipping options more to make better use of full truckloads.
Obviously, shippers cannot predict the exact amount of product needed in every location, but if shippers could use technology, like a TMS, in conjunction with existing warehouse management technology, like an integrated warehouse management system (WMS), to understand the market better, they could push the boundaries of prediction. Essentially, shippers could learn how to make better predictions, move product throughout their supply chains and realize savings through freight consolidation, even when orders have not yet been completed, which reduces total cost of ownership in transportation.
Up next, we delve deeper into the role of a TMS in managing full truckload shipments from initial order tender through payment, and if necessary, returns management.
General rate increases (GRI) are expected each year in less-than-truckload shipping, but the GRIs for 2018 may easily soar past expectations. Meanwhile, full truckload rates are also rising, but full truckload rates may be less expensive than continuing to use LTL shipping options. An unplanned shipment, poor shipment attractiveness, and other factors may adversely affect full truckload rates per shipper. As a result, more shippers are looking for ways to take advantage and budget better for full truckload, and shippers that understand the nature of contracted versus spot rates for full truckload are poised to overcome this problem.
Shippers often express concerns and challenges to leveraging full truckload, but how do they budget better for full truckload freight? This problem is not due to just capacity; it derives from inexperience too.
Small and mid-sized shippers may not have the skills necessary to negotiate transportation contracts, including those involving full truckload shipping. If negotiations rely on an understanding of all inbound and outbound freight statistics and processes, lacking information will result in strong variances between rates and trouble securing available capacity.
As explained by Steven C. Beda of Inbound Logistics, this problem grows when applied to international shipping, and shippers may not even be considering total shipping costs. For example, Zipline Logistics denotes these factors affecting freight rates and spend:
These factors also impact full truckload rates, so avoiding them in a contract negotiation is a terrible idea!
Communicating information clearly and concisely is essential to taking control of full truckload variables to avoid struggle in lieu of the capacity crunch. Shippers should provide as much information as possible and complete the order tender process as soon as possible. Although everyone claims full truckload only depends on lane and destination, drivers may take into consideration factors that affect GRIs in other modes. Therefore, informed shippers can take greater control over the process.
Shippers must also understand the typical life of a full truckload shipment. As explained by Zipline Logistics, a typical process for full truckload includes the order tender, freight scheduling, dispatch, loading, transit, unloading and delivery, and billing. In the digital age, another step may be involved-auditing the invoice and identifying potential instances of overbilling or double billing too. Independent contractors (drivers) also increase risk of such problems, so shippers need to take control over all variables.
This includes working with experienced full truckload and multi-modal freight brokers, such as third-party logistics providers (3PLs). Depending on the 3PL, additional services, like invoice auditing and value-added services may be available. In fact, Cerasis offers these services too. Plus, working with a 3PL may open the door to even greater savings and enables control over full truckload freight management.
Imagine letting a 3PL handle the process for full truckload shipping. While decreasing in-house activities to manage full truckload freight, a 3PL may have access to discounted rates as part of a larger contract. A 3PL manages many shipper-client relationships, so the company has enough volume to tap into lower-than-average full truckload rates. This allows shippers to budget better for full truckload shipping.
Shippers seeking to budget better need to consider freight allocation, including identifying the most profitable and costly shipping destinations and origins. The budget changes, so do the factors affect truckload freight rates. However, contracted freight rates, provided an organization can meet demand, as stipulated in a contract, can be locked in. Also, working with a 3PL puts the experience of an entire company at the helm of negotiations, so your company can work on advertising, getting and retaining customers, and manufacturing, not just logistics.
Decisions affecting full truckload shipping will affect adherence or deviation to your freight spend projections and budget. To budget better for full truckload, you need an advocate for your company, a skilled negotiator that will use the knowledge and capacity crunch to get the best deal for full truckload shipping. Moreover, the lowest cost doesn’t necessarily make the best deal, so understanding how the industry responds to changes in volume within transportation hubs and the market is crucial to making informed decisions. Contracted rates are indeed possible in full truckload freight management.
Statistics on the industry-wide use of a transportation management system (TMS), like the Cerasis Rater, are lacking. The most recent report on adoption rates of TMS is from 2015, with only 35 percent of shippers actively using a TMS, asserts Bridget McCrea of Logistics Management. A TMS makes up only a fraction of the full truckload technology available to shippers. In full truckload freight management, technology will make or break plans for keeping freight spend in check. Demand for record-breaking speed of delivery and free shipping are only making the case for greater use of technology in full truckload freight shipping management, and shippers need to understand why.
Full truckload technology is essential to accessing the most carriers, drivers, and available capacity in a tight market. Amazon continues to push its own fleet forward, and the Big Box giants are willing to pay premium prices to get freight to market. Unfortunately, these factors make it difficult to attract drivers for full truckload freight from small and mid-sized shippers. However, technology can change the narrative.
As explained by Zipline Logistics, technologies used to improve full truckload freight shipping management must center on advanced, intuitive technologies. In addition, new legislation is on the horizon, and the electronic logging device (ELD) mandate is about to seriously affect available capacity. The pressure to move freight through any means necessary is on, but pressure to keep costs down continues. This is why technology is the solution. Think about what some of these top technologies can mean for full truckload shipping:
The use of cloud-based systems for logistics management offers many benefits to shippers looking to find the lowest-cost full truckload carriers and avoid steep rate increases. These benefits, reports Jamie Wyatt via Supply Chain 24/7, include:
Shippers must understand the role of technology in reducing costs for drivers, even if just reducing the stress associated with full truckload freight management. Thus, shippers should follow these steps.
Logistics technology is evolving, and full truckload technology will continue to get a bigger plate at the logistics dinner table. Shippers should begin the process of migrating systems to the cloud and consider outsourcing full truckload freight management to third-party logistics providers. This is an effective way to take advantage of best-in-class technology without the upfront development costs associated with in-house technologies.
Believe it or not, product in the care of a driver does not necessarily place all liability for freight in the hands of the carrier. There are exemptions to liability within the Carmack Amendment, and even when everything is correct on paper and goes smoothly at the place of origin, Mother Nature may have other plans. Shippers need a way to mitigate risk of full truckload shipping, regardless of what promises a driver makes in casual conversation.
Risk exists in all transportation modes, and failure to consider risk in full truckload shipping is a poor strategy that will result in loses. Some shippers operate under assumption, but assumption will not pay for damages.
As explained by Lisa Terry via Inbound Logistics, transportation liability grew more complex with economic growth and an increasing number of contracted drivers and carriers. Under federal transportation law, and the Carmack Amendments, carriers traditionally held liability for freight until delivery, with four specific exclusions, but individual contracts may make liability unclear. Meanwhile, the Amendment and the Federal Motor Carrier Safety Administration’s (FMCSA) Compliance, Safety, Accountability (CSA) program enforcement leaves shippers and carriers dazed. As a result, shippers may assume carriers retain liability. False assumptions about outside entities also leave carriers under a false sense of protection from damage and liability.
Outside entities are just that, outside, and they are focused on their own interests, as well as the interests of their clients. As a result, carrier contracts may carry high deductibles, limitations, or exclusions, even when carrier liability is stipulated in a contract. Therefore, shippers should review existing policy or contract liability and opt for additional cargo insurance to reduce risk, depending on freight fragility.
Upon review of existing policies and strategies to mitigate risk of full truckload shipping, shippers should look at all available options. This includes purchasing freight or cargo insurance.
Cargo insurance literally insures freight against damage or loss, provided such losses are within policy limits. While carriers may offer a certain amount of “given” coverage for full truckload shipments, the independent nature of full truckload opens the floodgates to risk. An overlooked detail could result in losses exceeding $100,000. Remember full truckload requires a full van or trailer, and damage to small items adds up quickly when expanded to 42,000 pounds of merchandise. Thus, shippers should consider purchasing additional cargo insurance when using full truckload.
For example, Cerasis Cargo Insurance insures freight from “warehouse to warehouse,” covering transitions between carriers, if applicable. Although most full truckload freight has a single pickup and drop point, on occasion freight may change carriers. Cargo insurance serves to reduce risk associated with such transitions and covers carrier limitations too.
Cargo insurance may seem like an unneeded feature, but imagine how a sudden storm in the Midwest could popup without warning. Tornado Ally is littered with the memories of entire truckloads tossed aside like matchboxes. Even when purchasing cargo insurance, shippers should follow a few tips to help mitigate risk in transit.
Cargo insurance must never be an afterthought. Full truckload freight can represent millions of dollars of product, and the risk, even when it is an unforeseen risk, will always be present. Shippers can mitigate risk of full truckload shipping by purchasing cargo insurance for any and all shipments. The curve ball is coming. If your organization has never lost product, nor purchased cargo insurance, it could be amazing luck. Then again, it could be your turn…
Send this to friend