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Five ways to beat the carrier capacity crunch
Capacity in the freight market is tight due to a few factors, including a strong economy, and strong freight demand. When these are coupled with the current truck driver shortage it’s evident why space on trucks is at a premium. Many shippers are now finding themselves with more freight to ship, than there is carrier space available to get it delivered.
There are several ways that shippers can combat these challenging market conditions to get their loads delivered, both cost effectively and on time. Here are five you may not have thought of:
Use a TMS– A Transportation Management System can make load planning and optimization of truckloads faster and easier. When this process is done manually it is both time consuming and open to error. TMS technology ensures that the minimum capacity truck necessary is utilized. It also helps shippers lower their risk by vetting trucking partners optimizing routes and meeting due dates despite market conditions. Some TMS also offers analytic tools that enable shippers to make high level strategic decisions based on real data to keep their operation running efficiently.
Focus on carrier relationships– Leveraging positive carrier relationships helps shippers and 3PLs consistently find capacity that aligns with carrier’s preferred lanes and back haul needs. This is mutually beneficial and a quick conversation with any carrier can help uncover what they are looking for and help optimize their own networks. For example, a shipper can offer longer weekend routes to satisfy carriers that want to maximize driving time. Also by finding out where carriers have empty miles, shippers can optimize utilization for carriers making their own loads more desirable.
Look at regional routes– Separating freight bids by region instead of looking at it nationally can be a more productive way to find capacity. In order to make loads more attractive to their own drivers more carriers are providing regional coverage. Regional carriers are also better at managing assets and guaranteeing capacity, which translates to better and more reliable service.
Be a shipper of choice– In today’s market, carriers are able to choose which loads they want to ship, and which ones they do not. A company can become a preferred shipper by paying invoices on time, being reasonable about accessorial and chargebacks, and providing a pleasant experience for drivers at pick up. Carriers want to work with shippers that value the relationship and are good to work with.
Consider dedicated contract carriages– Dedicated Contract Carriage (DCC) is one way for shippers to lock in rates and capacity regardless of freight market changes. Dedicated capacity networks benefit both shippers and carriers with carriers enjoying consistent volume and shippers 3PLs avoiding the spot market. Shippers also get improved service level for on-time pickup and delivery. And they can choose their own driver pool, partner with other carriers, or outsource dedicated transportation to a third party provider.
Shippers who utilize these strategies, will be more likely to manage the capacity crunch, while building positive career relationships. With freight demand rising, and no capacity expansion in sight, shippers and their 3PLs must develop new strategies to keep their loads moving and their deliveries on time.
Thank you for listening. For a free, no obligation, analysis of your logistics spend visit TransportationImpact.com. Have a great day!