The shipping and transportation industry is in the midst of an evolution.
New technologies are bringing light to the furthest corners of supply chains, and shippers are struggling to find available capacity.
Full truckload carriers are starting to turn away freight in the 5001 to 10,000 weight band, and fuel surcharges are forcing prices higher.
Even LTL carriers, which typically enjoy more capacity than other types of OTR transit, are starting to feel the effects.
In turn, shippers’ freight spend is inching upward, but regional LTL carriers can help shippers keep freight spend in check.
Shippers need to understand why LTL use by shippers is increasing, the value of regional LTL carriers and how to select the right LTL carrier for their organization.
LTL use is increasing across the board. This is in response to tightening capacity in full truckload, which ranks at an eight on a scale of 10 regarding severity.
With full truckload carriers turning away freight that might otherwise be destined for a long-haul, more shippers are turning to LTL to tap into available capacity.
At the same time, LTL carriers that have typically enjoyed lower driver turnover rates are starting to see such rates climb.
As a result, capacity is further tightening in the LTL sector. Unfortunately, this will create higher demand for LTL, and more shippers will turn to LTL before capacity runs too tight to leverage.
According to Logistics Management/Supply Chain 24/7, demand created by e-commerce will push more parcel carriers to move freight toward LTL.
Although the top 25 LTL carriers operate 90 percent of the market, shippers should not overlook the 10 percent that exists in smaller, regional LTL carriers.
Heavier shipment volumes are associated with higher revenue per shipment, says William B. Cassidy of JOC.com, and as with any business, higher profitability will result in reinvestment.
This may be in the form of better pay for drivers, technology to reduce delays and additional processes that reduce overhead expenses.
As the cycle continues, overall costs for shipping freight for each shipper will decrease.
As explained by Inbound Logistics, shippers should follow a few tips to select the right LTL transportation provider and reduce freight spend.
The best-laid plans for a shipping strategy rely on the ability to leverage the best carrier resources available.
As capacity becomes a greater commodity in LTL, shippers need to start working to expand their LTL carrier options and find the carriers that can move freight promptly and at the right price.
Shippers should also consider unlocking the value in regional LTL carriers by following the steps above to find and work with regional carriers that meet the proper criteria.
Related: Applying Vital Less-than-Truckload Capacity Best Practices When Freight Volume is Tight
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