The question of necessity affects full truckload shipping decisions, and shippers might overlook full truckload options. However, shippers do need full truckload shipping, but they need to know how to take advantage of it properly to avoid ballooning freight spend and shipping costs.
The Issue: Shippers Face More Challenges When Trying to Avoid Full Truckload Shipping
Shippers are under increased pressure. Pressure from consumers, pressure from regulators, pressure from stakeholders, and pressure from the industry itself. Shippers need to keep costs down, and this means keeping rates in check. Unfortunately, the record-breaking growth of the US economy under the current administration is creating a perfect storm for shippers trying to stay in business. There is simply not enough capacity available in the US logistics empire. Spring shipping has not yet peaked & therefore, shippers need to prepare now.
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Although these factors predominantly affect full truckload, their implications will result in a ripple throughout the entire transportation industry. No freight plan will be safe from rate hikes, so shippers must understand more about how to take advantage of full truckload to keep freight spend in check.
The Solution: Using Full Truckload is Ideal for Shippers Moving High-Volume, Consistent Pallets
The big problem behind using full truckload versus less-than-truckload (LTL) derives from simply not having enough freight to justify sending a shipment via full truckload, but freight consolidation turns this argument upside-down. Shippers can realize the same benefits of LTL shipping with full truckload freight consolidation, partnering with nearby shippers and third-party logistics providers (3PLs), to take advantage of the lower rates available in full truckload shipping.
While LTL shipping is regulated by the National Motor Freight Traffic Association (NMFTA), full truckload freight rates depend entirely upon market variables. This means increased capacity in full truckload has the net benefit of lowering overall full truckload rates, and regardless of space available within LTL vans, the NMFTA sets the rate.
The true benefits of full truckload shipping grow faster for shippers moving high-volume, consistent freight. In other words, shippers who are regularly moving high-volume freight at frequent intervals increase their bargaining power, read “lower-cost and discounted rates,” when it comes to procuring full truckload shipping.
The Reward: A Mix of OTR Shipping Modes Enables Cost Savings and Speeds Shipping
In general, full truckload shipments are generally more expensive than LTL, but they require less handling. This reduces risk to freight, which can have major implications for sending sensitive equipment or fragile product. Think of the savings possible through processing fewer freight claims, and since freight within all truckload vans has a single unloading and loading touch point, there is less chance of a shipment being lost or overlooked.
The continuous route of full truckload makes it a viable option for shippers needing to move product from the ordination destination as fast as possible. Since the truck does not need to make multiple stops, as with the case in LTL shipping, freight arrives faster.
There will be plenty of times when using full truckload simply does not make sense. An end-user may order a single product, or your company may not have plans to ship product to a reseller nearer to that end user. In this case, parcel or LTL shipping makes more sense, and these modes achieve reasonably fast delivery. However, shippers involved in business-to-business sales can use full truckload to move the majority of product faster to their business partners.
For instance, Shipper A is a supplier of live plants, and such items may be sent in a dry van, over the road, as a full truckload, and the same destination. If Seller B is a local or regional distributor of live plants, it would make more sense to use full truckload, but if Seller C will only need three live plant pallets, there needs to be a transition between full truckload and other transportation modes to bring the overall costs of the freight shipping down. This allows for the continued use of full truckload where necessary.
This is known as intermodal shipping, but due to its complexity and unique best practices, it will be explained in greater detail at the end of the series. For now, consider the full-truckload portion of the journey, shippers can use this knowledge to create a landing of transportation modes that keep overall operating costs down.
Putting It All Together
Big shippers have a bit of the safety net in the forthcoming rate increases, but small and mid-sized shippers must re-evaluate shipping options stay competitive and survive. Although full truckload rates are increasing, small and mid-sized shippers can leverage power in groups, using a third-party logistics provider (3PL), to tap into the resources of full truckload shipping.
Next, will take a closer look at how a 3PL can achieve this feat.