Small and mid-sized shippers face many challenges in full truckload freight management. Different carriers charge different rates, which reflect the relative trucking activity of a destination, and freight management requires navigating a complex system of drivers, trucks, and trailer types, while trying to get the best deal possible.
In today’s age, full truckload is in-demand, and rates are rising much faster than this time last year, by 25 percent in some markets, explains the Journal of Commerce. Shippers that forgo review of full truckload shipping options will pay higher rates and struggle to accommodate changes in truckload availability. These challenges in full truckload freight management are not omnipotent, but they do carry enough weight to warrant an understanding of their contributing factors. Fortunately, shippers who take the time to understanding such contributing factors and best practices can proactively manage full truckload freight.
Decreased Full Truckload Capacity
Tightening capacity is the dominate problem in the shipping industry, regardless of mode. Carriers have announced major rate hikes, and as of January 2018, rates had risen significantly more than anticipated. In addition, the nation’s major shippers, especially Big Box retailers, are willing to do whatever is necessary to get product to market, even paying above-market rates to carriers. Although this translates into greater wages and success for carriers and drivers, it further tightens available capacity. The only solution lies in using as many carriers as possible to increase available capacity.
Low-Volume Destinations Incur Higher Rates
Full truckload is subject to varying rates due to not being regulated by the National Motor Freight Traffic Association (NMFTA). Freight rates depend on the market, and low-volume markets will result in higher full truckload charges than in-demand markets. However, the lack of contracted rates among most truckload carriers, especially among smaller, locally owned carriers, opens the door to potentially lower rates.
Smaller carriers know they must stay competitive with larger carriers, so tapping into the resources of these carriers is essential to mitigating higher rates for low-volume destinations. A shipper may use dozens, if not hundreds, of individual truckload carriers. Therefore, shippers should use a dedicated freight and transportation management system (TMS) to manage the various relationships and streamline freight scheduling of full truckloads.
Hourly Loading/ Unloading Charges After 2-Hours
Depending on the specific terms of a carrier, truckload carriers typically give shippers a total of four hours, including two hours to load and two hours to unload freight. Any deviation from this allotment can be billed at extreme rates, which drive overall freight spend higher.
Shippers should package freight and stack pallets to prevent this problem from occurring. All freight should be packaged appropriately, asserts Supply Chain Brain, and pallets should be wrapped in shrink wrap to prevent a product from breaking free, optimizing the load and streamlining the loading and unloading process. Also, all shipments should be ready for loading or unloading upon arrival for pickup or drop-off.
Best Practices to Overcome Full Truckload Freight Management Challenges
Shippers seeking to take advantage of the lower rates of full truckload shipping need to follow a few best practices to ensure accuracy in billing, timeliness in pickup, transit, and delivery, and access to the best-in-class rates available. These practices include the following:
- Stay in Tune with Full Truckload Trends. Carrier rates fluctuate and reflect market demand and conditions, including lane of traffic driven and mileage between origination and destination. Shippers that pay attention to market trends are more likely to notice instances of higher-than-typical rate charges or billing details.
- Develop Consistent Shipping Schedules. Carriers have a vested interest in moving product, and consistency and accuracy in shipment scheduling will make freight more attractive to carriers. As a result, shippers are more likely to access capacity.
- Stay Flexible. Things change. This is a fundamental concept in the transportation industry, explains Chris Brady, as seen with the 2017 hurricane season, and shippers can use it to their advantage. A canceled shipment might mean available capacity on a backhaul or a change to the pickup schedule. Thus, shippers should be flexible with freight scheduling, giving carriers enough time to schedule the shipment or arrive early, if available.
- Outsource Freight Management. Considering the argument for consistency and staying vigilant over industry trends, shippers are apt to reap better availability, capacity, and rates through 3PLs. Outsourcing is also an excellent way to take advantage of new technologies, like a cloud-based TMS, to handle all processes and ensure superior accountability and access to best-in-class full truckload rates.
Don’t Let Challenges to Full Truckload Freight Management Get You Down!
It would be easier to just schedule everything through less-than-truckload, but why pay extra if you have the volume, schedule, and resources to leverage the power of full truckload shipping. Challenges in full truckload freight management can be overcome through simple steps and staying on top of your shipping priorities. Stop wasting time trying to manage full truckload freight management in-house and migrate the process to the safety and security of the cloud, and let a 3PL do the worrying for you, while still cutting your costs wherever possible.