Capacity and costs have almost become buzz words in logistics. Companies can’t help but mention capacity crunches and increased costs when reviewing their supply chain challenges. If you want a resilient supply chain you must ensure the logistics partners you work with can continue to provide the necessary trucking capacity while also supporting your business with innovative solutions to help manage costs. As a shipper you must understand the drivers of cost increases, and do everything in your power to help support the smooth flow of raw materials and goods.
While transportation costs looked like they were set to rebound in January 2022, new challenges during that time continue to drive costs even higher. As such, demand for trucking remains high into 2022, and we continue to see a shortage of qualified truckers. This shortage of drivers, made worse by COVID mandates and subsequent border disruptions, has caused cross-border trucking rates to continue to increase. Now with diesel sitting at well over $1.70 per liter, nearly 42 percent higher than where it was just one year ago, trucking costs will continue to rise as carriers adjust their Fuel Surcharge to match the sharp increase in fuel costs.
With no end in sight to rising freight costs and capacity continuing to be a challenge for the industry, you can strike a balance between capacity and cost by leveraging these logistics strategies:
Consider alternative modes of transport, for example using rail instead of road; or alternate equipment types: step/drop decks instead of flatbeds to allow for more options in moving your goods. This is as straightforward as it gets, the more options available to ship your freight, the more likely you’ll match a truck to your load. Be open minded to alternative ways to move your freight safely.
Gone are the days of issuing last minute load confirmations or dispatches to carrier partners. With carriers often booking weeks in advance, you should provide at least a week's notice for all loads to ensure capacity is secured for you. Ideally you should prepare schedules for your outbound and inbound freight needs and schedule shipments multiple weeks in advance. By preparing advanced schedules, trucking companies will prioritize your freight.
Wherever possible, work with your suppliers to consolidate orders into larger shipments or ship your cargo as Full Truck Loads (FTL) to help save on transportation costs. In today’s market when given the option of moving FTL loads as compared to Less-than Truck (LTL) loads in today’s market, many trucking companies are choosing to focus on the FTL market. Having a single shipper and single consignee reduces the hassle and headache for trucking companies. As a shipper you should build larger orders so that shipments can move consolidated as FTL loads.
Being a Shipper of Choice means that the environment and experience at your facility is appealing for truck drivers and carrier partners. This means ensuring that drivers are loaded and unloaded in a timely manner, drivers are provided with simple amenities such as restrooms or access to refreshments, and your shipping/receiving hours are long enough to accommodate a greater capacity of drivers. Being accommodating to your carrier partners goes a long way in ensuring capacity is available for your business.
A good Third Party Logistics Provider increases your chances of securing freight carriers at reasonable rates, and helps you work to become a Shipper of Choice. LibeRate Logistics works with our clients to ensure we offer several modes of transport options, consider a multitude of transit time choices, and communicate all shipping and receiving requirements to ensure shipments move as smoothly as possible.
Managing capacity and costs can be difficult in today’s logistics landscape, working with LibeRate Logistics will allow you to have the global logistics insights necessary to continue to move your business forward.