The capacity crunch has arrived, and shippers are scrambling to find ways to make a profit in logistics. The wrong strategy or blend of transportation modes will result in losses, and since consumers only see product costs through Amazonian eyes, increasing product price points and shipping charges is unacceptable. However, the benefits of full truckload shipping can be accessed by approaching logistics from a strategic vantage point, understanding the mode more thoroughly.
The Problem: Shippers Often Overlook the Benefits of Full Truckload Shipping
Full truckload shipping requires shippers fill an entire van or use a full flatbed trailer. Shipping costs are the same for a given type of shipment in full truckload. According to USA Trucking Services, full truckload freight shipping may vary by carrier, including those transporting general merchandise or specializing in a type of shipment, like cold storage.
During a shipment, explains Zipline Logistics, the trailer is filled by a shipper within the carrier’s expectations, including weight and volume. The driver receives all paperwork, including the invoice, bills of lading, customs information, and route instructions. Unfortunately, the volume and weight minimums leave shippers viewing full truckload with distrust or uncertainty, yet it could be used more productively to net huge benefits to shippers.
Full Truckload White Paper Series
Access our complete Full Truckload Shipping White Paper Series.
The Solution: Understanding the Benefits of Full Truckload Shipping
The best way to approach a fear lies in understanding irrational beliefs surrounding such fears, and the same concept holds true in approaching full truckload shipping. Full truckload shipping, depending on destinations or origins and fuel costs helps shippers realize these benefits:
- More backhaul opportunity. According to PNG Logistics, drivers need to reduce deadhead, and high-volume destinations result in more backhaul opportunities.
- Lower cost for high-volume destinations. Since more drivers are headed to high-volume destinations, they are inclined to offer better rates to shippers with freight.
- Independent Full Truckload Rates Depend on Distance, Lane, and possibly fuel costs, explains Independent rates mean shippers have bargaining power with carriers and drivers, which helps keep costs down.
- Less expensive than LTL. As explained by USA Trucking Services via SlideShare, this benefit derives from a shipment’s single place of pickup and drop.
- Full truckload is faster. Since full truckload shipments are only traveling to one destination, fewer stops translate into faster delivery.
- It carries less risk than other modes. Fewer touch points reduce risk, and since marginal risk derives from the time it takes to arrive at a destination, which is expanded in perishable freight, full truckload reduces risk.
It is also important shippers understand the characteristics of full truckload freight, which can be used to make freight more attractive to carriers as well.
Taking advantage of full truckload requires shippers to know when it is better to use full truckload than other modes. This means understanding freight characteristics that should denote use of full truckload, which include the following:
- Requires specialized equipment to transport.
- High-volume or high-weight freight.
- Freight in need of faster delivery.
- High-volume destination.
The Reward: How to Push Benefits of Full Truckload to Their Limits
Full truckload capacity is tight, but a pragmatic solution exists to tap into “unavailable space.” Shippers must be willing to work with more drivers, carriers, and third-parties to ensure they are getting the best rates possible for a given lane and route. In addition, shippers should submit regular requests for proposal to such entities to stay informed of current and competitive rates.
Shippers can push the benefits of full truckload further by making freight more attractive to carriers and drivers. Driver availability plays a major role in determining capacity. Shippers should take steps to brace for tighter truckload capacity, following 2017’s natural and manmade disasters, reports Chris Brady. By some estimates, most drivers are not carrier-affiliated; they are independent contractors. Preserving this workforce is critical to reaping cost savings from full truckload, so making the process simpler for drivers could have the effect of guaranteeing future availability.
Putting It All Together
The benefits of full truckload are significant and can be a source of increased profitability during a capacity crunch. Furthermore, freight consolidation to transform more LTL shipments to full truckload freight is critical. Even though truckload rates are rising, shippers can use full truckload to vary freight shipping options to move more product and lower operating expenses. Of course, working with a third-party logistics provider is another excellent way to tap into the value of full truckload. Since full truckload often involves independent drivers, it is important to understand how to mitigate risk even further.