Truckload Capacity

An article in this week’s Journal of Commerce at: http://bit.ly/1kiFjYo, sites the raw statistics on truckload shortages. It quotes US Xpress Enterprises as saying it turned down 1,200 loads a day during the winter month and 600 loads a day in recent weeks. That is double last year’s level. Morgan Stanley puts out weekly graphs on truckload shipments comparing loads offered to accepted and that line is way over the median for calendar 2014.

This will continue until driver shortages and capacity are aligned. Wages will need to go up to attract more drivers. Rates will have to go up to attract more capacity. As a result, more and more long haul truck business will go on to the rail. Intermodal rates will go up but not so high as to make customers want to ship back to truck.

Here is what a shipper of freight can do to limit cost increases:

1) Pay your freight bills on time. Carriers will choose those firms that pay their bills timely.

2) Be carrier friendly by getting trucks in and out in a timely matter, as time cost money for the carrier.

3) Develop a business relationship with a carrier or third party your firm uses. Not only will advance planning allow truck capacity to be there when you need it, but planning may allow both parties to save cost through increase equipment utilization.

4) Consolidate shipments when you can. It is many times less costly to send a full truckload to a distant distribution site serving the customers near that distribution facility and use local carriers from there.  Local carriers are less capacity constrained than long haul truckers.

South Loop Logistics can help in this process if you need assistance.

 

 

 

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