LTL Freight Market: Carrier Capacity Update
When procuring transportation services, shippers primarily consider three factors: service, cost, and capacity. While all three factors are in some degree of consideration when freight decisions are being made, capacity is the factor that has become most critical in midyear 2021.
At times, like the current state of domestic transportation in the U.S., freight capacity becomes more critical than cost or service, because if there are no trucks available to pick up goods, then this leads to a variety of issues for businesses and customers alike. This situation tends to be very apparent with the truckload market, but it can be just as critical with the LTL industry as well.
LTL carriers tend to have adequate equipment capacity to make pick-ups and deliveries, but their operational model is based on constant flow. This model does not do well when freight needs to be delayed or deferred, since LTL carriers have cross-dock facilities, not warehouses. Consequently, dormant freight usually gets stored on a trailer, creating many inefficiencies, such as trailers moving in and out, freight getting handled multiple times, and changes in inventory location, etc.
In the past few years, but especially since the COVID era began, LTL carriers have experienced an unprecedented amount of wasteful detention. This detention manifests itself in two distinct ways:
- Driver Detention: Drivers are LTL carriers’ most valuable assets. As such, it is critical that a driver gets into and out of a facility as quickly as possible.
- Trailer Detention: There are thousands of trailers in the LTL network with freight waiting for an appointment or to be unloaded. As mentioned above, the operational model of LTL carriers is based on constant movement, so trailer detention can result in issues.
To be as efficient as possible, LTL carriers are forced to improve their driver and equipment utilization. And in order to do so, several carriers will begin to insist on being compensated for blatant and wasteful detention. This is not meant to create more profit for carriers, but rather to discourage shippers and consignees from causing any kind of delay for drivers or deliveries.
As a shipper, you can help avoid excessive detention by taking the following actions:
- Expedite LTL carriers into and out of your facility.
- If security personnel are involved, ensure they are aware of the need to usher drivers in and out.
- Review your pick-up and delivery processes to eliminate or streamline any procedures that may unnecessarily waste time. For example, practices like getting signatures or printing documents can take additional time.
- Schedule shipments the day prior. This allows carriers to optimize their routes.
- Unload dropped trailers and call them in as empty as soon as possible. Keep track of the process for possible disputes.
- Read our Shipper of Choice white paper for more tips on maintaining strong relationships with carriers to ensure your company is one that carriers want to do business with.
At Echo Global Logistics, we’re always here to help you adapt to changes in LTL shipping. With our combination of industry expertise and one of the largest LTL networks in North America, we can determine the best LTL shipping strategy for your business.
We have negotiated pricing with over 120 top LTL carriers, which gives you access to lower rates and extensive capacity. Save time as our experts do the transportation legwork, including carrier sourcing, step-by-step shipment tracking, and auditing and billing.