Trapping for Fame and Fortune

Trapping for Fame and Fortune

Recent studies within our TMS have revealed carriers trapping freight to combine deliveries. Let me explain. The carriers know what freight is in their system. If they see a single shipment for a given delivery stop and yet there is another shipment on its way for the next day, often times they’ll trap the first shipment to deliver with the shipment on its way. In this way, they save the labor cost of a delivery.

Guaranteed Delivery?

The only way to avoid this practice is to book a guaranteed delivery or by working with or changing your motor carrier. This is especially troublesome in the retail sector where on-time-in-full is the order of the day. If you have a TMS that is updating hourly, you can see the status “Arrived at Terminal” but not “Out for Delivery” logging the date and time of these two events can help you pinpoint service failures. ShippersEdge TMS can be set to notify you if a shipment is being trapped at the destination terminal.

Given the penalties for late delivery by some retailers, making sure your shipment is not being trapped is just part of the job of an Enterprise TMS.

 

 

Intermodal not Answering the Call

As our national capacity crunch deepens with the ripening of a growing season in the south many people thought that intermodal capacity would be the answer to a capacity shortage. The real answer is not what people were expecting at all. The ELD mandate has struck intermodal in regards to drayage both for international container shipping and domestic traffic.

On the international side, long dwell times at ports and highly congested urban freeways abuses drivers and lax enforcement of hours of service before ELDs masked a problem that is now exposed. With the Panama Canal’s lack of immediate success, it may be possible that the intermodal drayage capacity crunch finally makes less congested ports a viable option.

What is happening on both the domestic and international side is that the consumption of driver hours is pushing what was theoretically a one day round trip on drayage in the 200-250-mile range into two day trips given the max duty time of 14 hours. This consumes equipment if not just the driver’s wages. You have to think about the fact that intermodal equipment is more finite and any consumption in terms of trailer days will affect the entire intermodal eco chain.

There are no easy quick fixes

Presuming the amount of intermodal conveyances, be it container or trailer can be increased, you still have to increase the number of seated tractors. There are no easy quick fixes.

Strangely enough, embargoing shipments with long drayage miles may actually help save intermodal. That will probably be done by strategic pricing, at least in domestic truckload side. The intermodal companies could effectively embargo certain points through pricing for being too far from an intermodal facility to be able to be serviced within a driver’s effective and now monitored duty cycle.

Adding intermodal capacity is an expensive proposition

The intermodal trailers also need intermodal rail cars and locomotives. These are large capital expenditures just waiting for the next recession. At some point, you also need to enlarge and enhance ramp facilities. Frankly, getting drivers should be the easy part simply because the drivers are typically home each night.

America is greening from the bottom up right now and expect things to get much worse when it comes to pricing and capacity before it gets better. The growing season always makes things tight in the seasonal states but doubtful you’ve seen anything like the crunch that’s lurking. Unfortunately, intermodal is not a near term answer.

ShippersEdge TMS can help manage all types of capacity www.shippersedgetms.com or call 952-777-4421

Moving Logistics In-House

What to expect when moving logistics in-house

Ten years ago, it was worth it to use a 3PL to manage your logistics management mainly because of the high cost of acquiring and maintaining the technology. Now more and more shippers are moving logistics in-house. Rating, managing and procuring freight transportation resources is time consuming and best if aided by technology. Today the technology resources are infinitely more refined and affordable than just a few years ago.

The biggest growth in transportation management software has been in the small to mid-sized business arena. Companies at or near even one million in transportation spend are able to take advantage of simple cloud based TMS applications. Companies who are at a larger spends who are not taking advantage of logistics management software are simply wasting resources and straight out transportation spend.

Acquisition costs of TMS applications rage from mere hundreds to low five figures in setup costs and monthly expenditures in the hundreds to low four figures are reported by most firms. The number of modifications from base functionality often affecting the costs of setup and configuration. The pricing of a TMS is not as important as what you can get out of it. ROIs can be achieved sometimes inside of a month.

With a TMS what you’re looking for is a leap from time wasting semi or completely manual methods of management such as spreadsheets and sticky notes. The quantitative leap to up-to-date technology is revealing in not only the speed and efficiency but the ability to provide analytics to make your decision making easier and more productive. You cannot manage what you can’t see.

A TMS can see or provide visibility into alternative scenarios for cost improvement and service improvement creating a more satisfying customer experience as well as a bottom line value. We now see the customer’s wanted in-house date and can compare to expect transit times. High address book functionality is often overlooked as a way of improving your customer’s service and satisfaction.

Freight audit and payment, an often-outsourced routine can be effectively managed in-house and seamlessly integrated with your payables. Often times the cost savings of being able to insource freight audit and payment can in and of itself, pay for a TMS.

Good reporting capabilities can also track the number of variances and rating errors by carrier providing KPIs for you to manage by. What good is great discount if every shipment exceeds estimated costs due to carriers trying to increase their yield by reweighing and dimensioning every shipment you give them. Certain carriers and even specific terminals within a carrier can be overly aggressive when it comes to weighing and inspection. What happens on a density classification when they add 200lbs to your shipment? Do they now classify it at a higher density? The answer is usually no.

Another key problem for transportation consumers today is available capacity and its incumbent effect on transportation rates. In some cases, especially with refrigerated and platform (flatbed) equipment. These areas are dominated by owner operators who finally see some sense of relief after suffering through eight years of recession and an historic anemic recovery. The demand for their services and frankly all commercial drivers will only intensify. Sourcing capacity can be difficult but with advanced technology the job can be made simpler.

What about shippers entering the spot market themselves? The fastest growing segment of the market for load boards is shippers self-managing their spot sourcing and trying to save the broker markup. You really should not even attempt to enter the spot market without good technology backing you up and frankly hiring personnel experienced in spot market vetting of truckers. Read my blog article on cargo security as only one pothole in a long road of ignominy in spot market dealings. https://www.shippersedgetms.com/blog/cargo-security

In summation, you’d be foolish not to explore insourcing your transportation and logistics management. If you’re already self-managing your logistics, technology can make your experience better and leaner while increasing your available information for improved decision making.

ShippersEdge TMS is a high value, modestly priced SaaS transportation management system. We can be reached at 952-777-4421 timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

Cargo Security

Theft by Misrepresentation of Identity

Here’s a scenario. Friday afternoon, an unsuspecting broker gets a call on a load of grapes from California to Toronto from a trucker based in Iowa. This trucker has one truck and says he can do the load. He also has a Gmail address using the name of the trucker. Broker makes the deal, sends the contract, service confirmation and his packet. Carrier executes the contract and service confirmation and sends back his carrier packet. Deal done, broker knocks off for the day.

Later he gets an email letting him know the load has been picked up, ETA in Toronto Tuesday morning and the appointment is made. Tuesday morning comes and the load has failed to arrive. What happened. He calls the carrier and gets an answering machine. He writes to the Gmail address, no response. Eventually a claim arrives for the missing load of grapes to the tune of $60,000. What happened?

In reviewing the claim, he notes that the only ID provided is the license plate on the trailer, nothing on the driver or the plate on the tractor. That license plate checked out to a junked trailer in a salvage yard. Driver’s signature is difficult to make out. A claim is presented to the trucker at his address in Iowa. Trucker denies any knowledge of the load, says that is not his signature and his logs show he was not in California.

This trucker’s office is not attended regularly. He uses an answering machine and while he had gotten messages about this load, he knew he hadn’t hauled the load and reckoned it was a mistake. Thieves look for one truck operations and check the presence or rather non-presence of personnel attending the phone.

The answer in this theft is phone number spoofing. The thieves, probably in cahoots with the shipping location, spoofed the solo operator’s phone number and created a Gmail account to send and receive documents. To the unsuspecting broker, he never called back the carrier to confirm the ID. Always call back a new carrier on the number provided in the Safer system or in FMCSA records. Check inspections, no inspections, noload. Also, if a driver on the road calls, verify he is who he says he is. Run his license plate, it will find inspection records.

Most cargo thefts originate on Thursdays and Fridays and especially on log weekend. This gives the thieves plenty of time to fence the stolen goods. Commodities without serial numbers are especially vulnerable. Most cargo theft involves an insider with enough knowledge of the load. Give your shippers the license plate number for the tractor and have them photo copy the driver’s license.

Shippers, it is a best practice to tighten your security including photo ID and license plate numbers. Require your brokers to provide this information to you prior to loading.

Tim Taylor

 

 

A surefire way to get more owner operator trucks

A surefire way to get more owner operator trucks

It’s about Fuel Surcharge

To get more owner operators interested in your loads, increase the fuel surcharge portion of truck pay. Owner operators typically get 100% of fuel surcharge revenue. Make your load more attractive to them by setting your fuel surcharge above market. If you’re using a flat pay per load, separate out fuel surcharge and let the drivers know.

Owner Operators are Especially prevalent in Platform Equipment

While owner operators are in all facets of trucking, they’re especially prevalent in platform equipment, such as flatbeds, step decks and other specialty equipment and refrigerated hauling. Drivers can accept or decline loads under their independent operators contract with their carrier. Differentiate yourself by slightly decreasing the base truck pay and increasing the fuel surcharge component of the load. Your owner operators will appreciate it.

Owner Operators Bore the Brunt of the ELD Mandate

If you stop and think through the ELD mandate, owner operators bore the brunt of the productivity decrease. Sure, the carriers themselves saw decreases in mile per truck, they more than made up for it with increased spot market rates. Drivers in congested areas of the country, especially so, whereas drivers in the wide-open west did not see as much of a reduction in miles per week.

Be kind to your owner operators, in most cases, they ultimately decide which loads they take and which ones they don’t.

ShippersEdge can be configured to automatically enhance fuel surcharge by slightly reducing base pay. Ask us about this. timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

 

13 Things Shippers Need to Know if They’re Going to Play in the Spot Market Without a Broker

Things Shippers Need to Know if They’re Going to Play in the Spot Market

 

  1. It’s the wild, wild west in the spot market. Be prepared to sift through the chaff to find your gems. There are a lot of scam artists in the spot market. Be very wary of 1 truck operations.
  2. Inspections matter one. If you’re seeing a trucker take a number of your loads check their inspections and make sure their being inspected. A low number of inspections per vehicle can indicate that trucker is double brokering your loads.
  3. Inspections matter two. You do need to look at https://safer.fmcsa.dot.gov/ and dive into inspections. Why? Because excessive equipment problems are a sign of financial instability. You can fix driver HOS violations but only money can fix equipment problems.
  4. Once you’ve entered the market your rates will fall. You should expect 15-20% reductions. A look at the largest publicly held freight broker’s publicly filed financial statements will validate this fact.
  5. You should hire an experienced freight broker to run your program and they don’t come cheap. Good brokers make high five figures and many reach into six figures. You will get what you pay for.
  6. When you’re talking to a dispatcher of a trucker, ask the question, are you unloaded now? Where are you? Where are your hours at? Listen very carefully to the answers. If there’s uncertainty in their voice, hang up.
  7. Get the license plate number of the truck, Google that plate number. By Googling the plate, the inspections for that truck should show up. No inspections, don’t load them Send the plate number to your loading dock for validation upon arrival.
  8. Take a photo copy of the driver’s ID. Walk around the truck. Make sure plate number matches. It is a good idea to take a picture of the placard on the side of the door and send it to the file. Get the drivers cell phone number.
  9. Be prepared for factors to call you validating the load and the amount. Better yet set up your own quick pay and advancing for further discounted freight charges. Factors charge 2-7% it’s well worth while to save this money yourself and knock out factors.
  10. You’ll need software to manage your spot market activities. Software that automatically does the inspection searching. Software that produces a trip contract. Software that assists in onboarding by checking insurance. shippersedgetms.com
  11. You need to keep track of lane histories. Truckers typically run the same lanes over and over. If you can book a reliable trucker while he’s still headed into your town, you are time and money ahead of the competition.
  12. Fuel surcharge goes to the owner operators be generous with your fuel surcharge. Drivers have a say in who and what they load. Giving the drivers a larger share of the load pay will make you a preferred shipper in the eyes of the driver.
  13. Watch out for crooks. The trucking world like any industry has their share of them and one crook can ruin your day pretty quickly. Double brokering, load theft are just two of the numerous problems facing the industry.

About the author. Tim Taylor is a recovering freight broker now marketing transportation management software for ShippersEdgeTMS.com he can be reached at timothy.taylor@shippersedge.com or by phone at 952-777-4421

How Shippers Compete Against Themselves in the Spot Market

How Shippers Compete Against Themselves in the Spot Market

You have had ever rising spot market freight costs. You’ve heard your broker explain about astonishing load to truck ratios, about equipment and driver shortages. Stop; just stop. First off, we do have a driver shortage (at $0.40 per mile) compounded by reduced actual miles driven due to the ELD mandate. One thing you shouldn’t do is offer your loads to multiple brokers.

There are NOT 30 loads for every available truck

Look, there are NOT 30 loads for every available truck, there can’t be, it’s not possible. Empirically, the load to truck ratio is exactly one-to-one. The only thing that changes is some commodities can’t travel as far due to increased transportation costs. It becomes more effective with some commodities to source them nearer the end user.

Drivers don’t post their trucks anymore because they get inundated with calls from brokers. That, along with multiple iterations of the same load by competing brokers, is why the load to truck ratios are so skewed. Drivers use their smartphone apps and shop for the highest paying rate. That there are so many brokers posting a load also being posted by other brokers, is driving up your rates. So, if you’re using multiple brokers for your loads; stop, stop driving up your own rates!

Asset based carriers do it too

Asset based carrier also have logistics [read brokerage] divisions and when you give them your load lineup they may well be posting that load on the spot market and tell you they don’t have capacity for you. They see the rates, on the spot market, they know where to make money and it’s not at low contract rates. They can and do place capacity in the spot market because it can pay twenty percent more than your rates. That situation will partially be solved upon contract renewals. They may even offer to cover some of your loads at higher spot market prices with a contracted truck.

Sometimes simply even asking for a rate from multiple brokers will cause appearances of the load you asked for a rate on to be posted on load boards. It happens all the time, even if you never tendered the load to them. Brokers generally know who their competition is and they can see your load being offered to the market, so they simply bid up the price to the trucker, secure a truck and call you. Meanwhile the broker you had given the load to can’t find a truck because he’s been priced out of the market.

What you need is a smart broker

What you really need is a smart broker, who can help you manage through this spiked environment. There are techniques that were used in other capacity constrained periods. If you want, contact me for more information.

A final note here. Driver pay is going up. I think it will be at or near sixty cents per mile by the end of 2019. It needs to go up. Over the Road truck driving is competing with local truck driving, construction and other busy areas of commerce for labor. A driver out on the road has expenses too for food and laundry and so on. They can work up to seventy hour weeks. Even at sixty cents per mile (about a 50% increase from December 2016) if the guy has to work 70 hours, that’s only a little better than $17.00 per hour.

ShippersEdge TMS is a tier-2 affordable full featured transportation management system for more information contact timothy.taylor@shippersedge.com or visit us on the web at www.shippersedgetms.com

 

 

Shippers Sabotage Spot Market

Shippers Sabotage Themselves in Spot Market

Many shippers don’t realize that they sabotage themselves in the freight spot market. It is standard doctrine that competitive bidding achieves a lower price. However, our application of that principle disrupts Adam Smith’s “Wealth of Nations” by creating artificial demand that results in higher shipping prices and less profit for shippers.

Sometimes just asking for a bid

Broadcast [and sometimes just asking for a bid] available loads to multiple brokers looking for the lowest cost. But, what actually happens is that multiple postings of the same shipment go out to the spot market load boards, creating falsely inflated demand. Truckers are smart and naturally will hold out for the highest price.

A new price higher price point for a given shipping lane is being breached every day; in part due to capacity stripped from the market by new electronic logging device requirements. As those thresholds rise, higher rates become the new normal, and it will be hard to drive those rates back down. Let’s also not forget the once inexhaustible supply of new trucking company entrants into the market, which is exhausting itself due to increased regulation and low driver pay.

Frankly they’ll hide their capacity

Shippers naturally will retreat from the spot market, and try and lock in contract rates There is a problem in that thinking as well. The spot market, actually pays more per mile than most major carrier bid lanes. It won’t be long before these major carriers shift more capacity to the spot market, frankly they’ll hide their capacity from you, the shipper.

We must remember that economic principles, properly understood and applied, will always serve the public and the logistics industry better than what we think is “normal” maneuvering.

See also this link  https://www.shippersedgetms.com/blog/logistics-softwa…spot-market-bids ‎

For more information, contact Tim Taylor at 952-777-4421 or timothy.taylor@shippersedge.com

TMS Solutions

Create new capacity in a tight market

Capacity in a tight market

Down below I talk about how to create capacity in a tight market, but first a little backstory. For thirty years I was a freight broker. I also trained at least a hundred more. This trick is in every broker’s book and could raise your freight rates. Here is a link (below) to the full LinkedIn article on it.

Summary of how to not use the spot market

Here is a summary but by far not the complete story. Essentially when you go to get a quote from multiple brokers, they are immediately posting that load to the load boards causing near outrageous load to truck ratios. 10 to 1 or 20 to 1 load ratios are not realistic and in fact are not true except for posting. The truckers see this and jump from broker to broker to see who will pay them the most. The net effect is freight rates go up.

Your intentions are good but your tactics need brushing up

While your intentions, to get the best rate are good in normal circumstances they actually hurt you when taking your freight to the spot market. Doing all your business with contracted carriers is probably also not realistic as they too see these tall rates in the  spot market and dedicate ever growing capacity to the spot maret while telling you no trucks available. They are not dummies.

All carriers are short of drivers due to electronic logs and an economy on the upswing. We do have tactics deployed through software, that can help you manage through this capacity shortage but they’re proprietary and you have to talk to me to get them. Remember I was a broker for 30 years, I know all the tricks.

 A link to the whole story

Here is a link to Confessions of a (Freight) Broker https://www.linkedin.com/pulse/confessions-broker-tim-taylor/

To get my advice on how to create new capacity in a tight market, write me at timothy.taylor@shippersedge.com or call me at 952-777-4421 also visit us on the web at www.shippersedgetms.com

Why having your vendors ship to you collect is a best practice

Why having your vendors ship to you collect is a best practice.

Many vendors ship prepaid or prepay and add and most markup freight charges. That in and of itself is a good reason to have your vendors ship to you collect on your account. There are more reasons one of the most important is visibility of your incoming shipments in transit. By having visibility, you can spot possible supply chain disruptions before they have a downstream bad affect.

Visibility is key

Using the capability of a transportation management system to track incoming shipments you can instantly see when and even if your materials shipped. By importing your purchase orders with a required in-house date, a TMS can be configured to issue a warning if a required shipment has not entered the system in time to meet your requirements and avoid a line shut down or disappointing customer with a back order.

Do you charge back your vendors for the additional freight charges on your order when they back order you? With a TMS you can track the additional freight charges when a vendor does not ship a full order. Back orders could be costing you more, in freight charges, than you think but who has time to track those costs using manual methods?

Trapped shipments

Are you a large distributor or manufacturer? Freight carriers often trap or hold shipments in a trailer to reduce deliveries. That could have significant savings for them and unstable delivery times for you. By using a TMS that tracks statuses like “arrived at terminal” and comparing to “out for delivery” date/time, you can work with your transportation providers to avoid having your freight held at the carrier’s yard and not delivering the same day it arrived.

ShippersEdge is a mid-tier transportation management system that can make you money, save you money and avoid delays on your incoming shipments. You can learn more at www.shippersedge.com/info or by writing to timothy.taylor@shippersedge.com 952-777-4421.