A Look Back: A Year of Challenges in LTL and What You Can Do to Make 2022 Better
As 2021 comes to a close, we are going to take a look at the current market conditions of the shipping industry and some of the LTL shipping topics we have examined over the course of the year to reiterate the best shipping practices that will make your LTL freight experience the best it can be.
Market Condition Update
In the past year, the national freight market has faced a slew of challenges stemming from an increase in freight tonnage and resulting capacity issues, labor and equipment shortages, new safety regulations, and higher rates, all of which have affected local markets in different ways. The freight industry throughout the country is experiencing delays and congestion. Over the past few months, we took a closer look at how these challenges are affecting local market conditions and how shippers and carriers are dealing with them.
More Demand, Less Space
Capacity issues have been a significant problem since the start of the pandemic. Stay-at-home orders and social distancing mandates have resulted in an increase in eCommerce and general freight movement as businesses adjusted their models to adapt to new protocols. But while demand for freight skyrocketed, capacities tightened as driver and warehouse worker shortages took their toll. This imbalance, a direct result of pandemic labor shortages followed by a surge in demand, has led to freight congestion, longer transit times, and higher shipping rates across the industry.
From drivers to warehouse workers, freight markets throughout the country have struggled to meet the labor needs necessary to handle the growth in freight. Many freight carriers have been operating with fewer drivers and warehouse workers since the start of the pandemic, and it has led to a struggle to keep up operationally. For instance, in Houston, while many warehouse managers have been able to maintain a core workforce to keep logistics running as smoothly as possible, the temp labor pool, which providers rely on to be flexible and accommodate seasonal upturns in freight, has shrunk significantly, making it difficult to flex up and down with surges in the market.
With so much congestion on the rails and in the market in general, warehousing and storage of freight waiting to be transported have also become more complex. In markets like Seattle, freight providers have traditionally been able to accommodate LCL (less than container load) freight at a small number of container freight stations within their network. But as the freight gridlock has increased, so has the need for warehousing space, forcing providers to seek third-party container freight stations to handle the overflow of cargo waiting to be broken down, consolidated, and shipped out.
Some shippers have tried to overcome the freight capacity issues clogging up the larger markets by circumventing them completely. Smaller markets have experienced a good amount of freight overflow from shippers attempting to avoid the backups that have plagued large port cities. For instance, because of the congestion built up in the larger west coast hubs like Los Angeles, Seattle, and San Francisco, Salt Lake City has experienced a fair amount of freight overflow from shippers looking to avoid delays in the traditional gateway hubs and move freight quicker through smaller markets. Customers looking to bypass Los Angeles have rerouted cargo through Salt Lake City to be consolidated and transloaded on outbound trucks in the hopes of finding faster transit times.
High Rates and Long Transit Times
Increased demand has led to carriers becoming pickier about the freight they are willing to transport, charging higher rates to move cargo, and extending transit times in order to keep up. The earlier shipments can be booked and communicated, and the more lead time that can be given, the better, as the holidays will only further constrict capacity and extend transit times. With so many delays across the industry, it is all the more important to get freight quotes from reputable providers that maintain good relationships with a reliable carrier network.
LTL Best Practices
The best way for shippers to adapt to the myriad of challenges facing the shipping market right now is to practice planning, communication, and patience. The further ahead shipments can be scheduled, and the more prepared shippers are with paperwork and packaging, the more chance at securing capacity and better transit times for a load. Open lines of communication between shippers and carriers are critical to ensure both sides can adjust when unforeseen obstacles arise in today’s chaotic shipping landscape and to manage the expectations of customers and distributors.
Freight Class and Precise Dimensions
Because LTL shipping involves a wide variety of products with different densities, liabilities, and handling considerations transported together in a single shipment, freight class codes are critical to provide standardization so you can negotiate the best rate for your shipment. Knowing the precise weight and dimensions of your shipment, as well as its corresponding NMFC freight class code, will prevent being charged additional fees for reweighs, reclassification, or inaccurate paperwork.
Use 3PL to Get the Best Rates
LTL shipping can be a huge cost saver, but it can be complicated to navigate. Rather than waste time managing your shipping in-house, you can save time and money by working with a 3PL (third-party logistics) platform like Koho’s that can provide the tools to streamline your supply chain and maximize your shipping efficiency. Shippers can rely on a 3PL to find the best rates offered by a range of carriers without the hassle of contacting each carrier individually, and high-volume and consistent shipping allow 3PLs to cultivate relationships that can help to secure better rates and preferred modes of shipping. A 3PL can also facilitate the creation and aggregation of all necessary shipping documents, providing the carrier with what they need and compiling the shipper’s documents into an online space that can be organized and accessed easily. Overall, working with an experienced 3PL will ensure that a team of knowledgeable shipping experts utilizing the latest technology is keeping an eye on your shipment and making sure it gets to its destination.
Prepare Necessary Documents
The two most frequently used LTL shipping documents for every shipment that must be understood are the Proof of Delivery (POD) and the Bill of Lading (BOL). It is critical that each of these documents is filled out accurately and signed for every shipment you make. PODs and BOLs are used to keep track of a shipment while it is in transit, account for items when they are delivered, and protect your business from liability, whether you are the shipper, receiver, or carrier. A BOL is a receipt that confirms the transportation of a shipment by a carrier. A POD is a receipt that confirms the delivery of a shipment and accounts for the items that have been transported and their condition.
Package Shipment Properly
How you package your shipment when shipping is crucial to its safety, protection, and transportability while it is in transit. Packaging comes in a wide array of materials and styles, and what you choose should be dictated by the items being shipped. The size, weight, shape, and fragility of your shipment will determine the correct type of packaging you select to keep your items safe from damage and make them easier to transport. LTL freight typically changes hands several times in transit, moving between trucks, carrier hubs, and warehouses before reaching its destination. This means that your shipment will likely face varied road conditions, changing temperatures, additional cargo shuffling, forklift loads and unloads, and other factors throughout its journey, and the packaging you select is critical to protecting your items from damage or loss caused by any of these potential circumstances.
Communicate and Track
Freight tracking is a critical part of supply chain management. Utilizing a 3PL to help manage your LTL shipping needs can help increase transparency when it comes to tracking your shipment. 3PLs like Koho provide shippers with a digital platform to manage shipments. They include tracking updates and information regarding delays and updated ETAs that can help shippers stay organized and informed about the status of their LTL freight. When it comes to potential delays, both avoidable and inevitable, sharing information between shippers, carriers, and customers is critical. Shippers must communicate all the necessary information regarding their shipment to carriers, and carriers must provide tracking information and updates to shippers. In addition, shippers must stay on top of any new developments or delays to their LTL freight in order to communicate effectively with their customers. Sharing information freely and thoroughly will allow all parties to manage their expectations and adjust to any disruptions to their shipping and supply lines.