Being Cheap Can Be Very Expensive in a Tight Shipping Market

trucking rates shipping marketLet me ask you a question…

…if you needed to buy a pair of shoes, would you rather spend $20 or $100 for the same pair of shoes?

(This does, I promise, concern today’s tight shipping market!)

Like most of us, you’re probably thinking $20 of course. None of us – myself included – likes to spend more than necessary.

The conversation changes, however, if we say that the $100 pair of shoes will last 2 years while that $20 pair of shoes will last a month. Suddenly, the $20 pair of shoes aren’t the same. While they may appear the same, they’re obviously of a lower quality with a real cost of $240 for the same period of time! In this case, the $100 pair of shoes is the best deal, isn’t it?

While this scenario highlights the importance of quality, it also exposes the ever important consideration of value. Everything has a cost; the question is how much value are you getting for your spend?

It’s the Cost-Value challenge people and businesses face all the time. In today’s tight shipping market, this exact challenge bleeds many companies of their profits.

Why Every Company Must Evaluate the Cost-Value of Every Shipment

When there are more loads than trucks, freight costs rise. It makes sense. Every shippers’ desire to find the lowest freight cost in an effort to protect margins also makes sense.

The problem is, one big claim can ruin the margins across the company. For example, if you’re shipping $50,000 worth of product, is a $250 savings on freight-spend worth the potential claim using the lowest bidder? A serious claim will wipe out the savings there and on shipments to come!

In a tight shipping market like this, shippers need to look at costs differently. Rather than viewing each load as separate ‘events,’ the cost of a load should be viewed in terms of “total cost.” This would mean all initial and potential costs must be accounted for. Living with “hope” that bad things won’t happen isn’t a business strategy.

Taking the example above, the freight cost of entire $50,000 shipment would be evaluated to minimize the entire possible cost from point A to point B. This means decisions would be made based on the freight-spend, potential liabilities, and frankly any other potential factors that could incur cost. Admittedly, we can’t know the exact number, but we can look at real elements of service that minimize the chance of increased costs or reduce or eliminate risk.

It’s a strategic approach to shipping. This approach protects you, your customer and your customer’s customer. In the long-term, it saves you money and makes your business profitable in the long-term.

The Simplest Way to Evaluate Cost-Value  

No one knows how long this tight shipping market will last. Several factors have contributed to it, including:

  • The ELD Mandate
  • Increased manufacturing
  • Not enough trucks/drivers to handle capacity

The ELD Mandate is not going away; shippers better get used to it. Increased manufacturing is dependent on the economy and can change. This second factor is also related to the final one which is simply not enough trucks/drivers. This has been a challenge in the industry for years and doesn’t appear to be changing anytime soon.

This means businesses that want to thrive more than merely survive need to adopt a strategic approach that enables them to find the best Cost-Value relationship.

Shipping brokers offer the best way to apply this strategy. As brokers, they make more freight options available to you and your business, finding the best value for the lowest cost. Many offer additional services to create practical long- and short-term strategies to lower costs and increase efficiencies.

Now, I’ll admit, I’m a little biased. But I’ve also lived in both worlds. I’ve been a shipper and a broker and I have seen how value-based strategies protect margins better than “cheapest rate.”

3PL Companies – Truckload Services Made Simple

a 3PL truckload freight imageFor a  3PL, booking a truckload delivery is checklist simple.  The resources and expertise of a 3PLcreate big benefits for both SMBs and larger enterprises.  They know how to plan, coordinate, and schedule the shipment so it gets out the door and delivered on-time and on-budget.

But a 3PLs services don’t end there.  Beyond shipment tracking, they can consolidate and analyze data to create strategies to make future shipments even more cost-effective.  Here’s how they simplify truckload booking and the benefits they bring.

The 3PL Checklist

All a 3PL firm does is book and manage freight.  They know the information they need.  They know the questions to ask to avoid unexpected surprises.

To arrange the paperwork and process the form efficiently, they need some basic information.  This includes:

  • Company and Contact Name
  • Phone number
  • Pickup location (City and State)
  • Drop off location (City and State)
  • A description of the load
  • Total estimated miles traveled
  • Total number of pallets
  • Shipment weight estimate

With this information, they move to the next step on their checklist.  That’s a few questions they’ll need to ask to identify special requirements.  These might include extra equipment you need, special classifications such as a hazmat load, and important delivery deadlines.

They might also ask if it’s a one-time shipment or will be multiple deliveries.

A 3PLs benefits really start with this next step.  They will plan the shipment.  They arrange the paperwork to make sure all the details are captured.  They coordinate and dispatch the appropriate personnel.  And they oversee the entire process.

The success of a truckload booking depends on the accurate and timely processing of forms.  A 3PL firm’s expertise allows them to do that for you.  And their expertise translates into big savings for businesses of every size.

Truckload Savings #1

3PLs save time.  For a company that doesn’t ship truckload often, they know the information needed and eliminate the back-and-forth with a carrier during the information gathering process.

They also have an extensive list of carriers that ensures they can find the service a business needs.  This eliminates the need to call around to find a carrier.  One call and you have the answer.

Plus, as subject experts they know the common problems that can occur and how to avoid them.  By avoiding common truckload booking pitfalls, they eliminate headaches and staff time spent on unnecessary problems.

All of this translates into faster revenue turn around.  Your product gets out your door and delivered faster.

Truckload Savings #2

 You could call this headache savings.  Or you can look at it as saving your customer service time for your customers instead of avoidable problems.

Look at it this way, when your truckload shipment delivers on time and without problems, you have happier customers.  And your staff can focus more on customer communication and solving customer problems rather than freight and delivery issues.  Happy customers always translate into repeat business and bigger revenues.

 Truckload Savings #3

A 3PL has access to dozens or more truckload carriers.  This means when you work with a 3PL you have access to all the services you might need.  It also means you can find the carrier with the lowest rate.

Beyond rates, a 3PL may also offer strategies to lower the cost of freight.  For example, a pallet based shipment may find big savings shipping partial truckload instead.  Partial truckload ships dock-to-dock like truckload.  Unlike truckload, it ships same day and requires a lot less planning.

And partial truckload may also offer substantial cost-savings.

To learn more about how a 3PL like Longshot Logistics can help you, or to learn more about partial truckload, click here.

When to Choose Partial Truckload

Truckload or Partial Truckload shippingNot every truckload shipment should ship truckload.  Sometimes partial truckload makes more sense.

That may sound like heresy coming from a truckload provider.  I don’t see it that way.  I see it as good customer service.

Partial truckload also goes by the terms “load-to-ride” or “volume LTL”.  It gives you the best of both truckload and LTL services.  Here’s a few reasons it may make more sense than truckload.

You need to deliver – fast!

A lot like LTL freight, partial truckload ships same day.  You call, get your quote and book it.  This gets your shipment out the door and on its way to your customer.  It’s a great solution for urgent shipments or when you just need to get your product out the door and on the road.

Like truckload freight, it goes dock-to-dock.  It doesn’t run through a hub like common LTL freight.  This means you can get your truckload shipment out the door same day.

Easier Load Booking

It requires less planning than full truckload.  This can save you a lot of time and energy coordinating pick-up and delivery.   Plus, quoting is a lot simpler.

Lower Costs

Partial truckload works on a fixed rate based on space used and weight.  This removes class from the equation.  As a result, in many cases a full truckload shipment broken into two partial truckload shipments will cost less.

The only way to find out it to ask your carrier.  If your carrier doesn’t offer this service, you can call around or contact a 3PL.

How a 3PL Makes Truckload and Partial Truckload Simple

Not all truckload carriers offer partial truckload services.  For that matter, not all LTL carriers offer these services.

A business can call around or search online to find a partial truckload provider.  But really, who has the time for that?

A 3PL like Longshot Logistics eliminates all this work.  One phone call gives you access to a host of common carriers and every service to meet every need.  And a 3PL professional logistics representative can  help create a strategy to meet your time and cost requirements.

Is partial truckload an option for every truckload  shipment?  No, of course not.  But in those cases where it does, the time and cost savings make it worth your while.

If you think 3PL services might benefit you, click here to learn more.

What is truckload shipping?

Truckload Freight Loading

TRUCKLOAD (FULL TRUCKLOAD)

Truckload shipping is the movement of miscellaneous cargo, specifically shipping the amount of goods necessary to completely fulfill a semi-trailer or intermodal container. Longshot Logistics will generally contract an entire trailer (or multiple trailers) at a discounted shipping rate.  This is not to be confused with less-than-truckload shipping in which a trucking carrier will mix freight from multiple customers to fill each trailer. One benefit of truckload shipping is one carrier will typically handle your freight from start to finish reducing shipping issues.