Truck capacity is stretched tight and motor carriers are heading into peak retail season with a full head of steam. Just how tight is it?
A leading indicator, Truckstop.com’s outbound tender rejection index (OTRI), currently stands at 22.48. The normal market rate is 5%. Truckstop.com’s market data also shows that spot rates have gone up an average of 20%, year-over-year, for all freight sectors.
An internal metric used by logistics service providers (LSPs) daily to gauge capacity is their percentage of pre-booked loads. The lower the percentage, the more work it takes to find trucks to cover loads.
“We are seeing a lot more of that work being done,” said Mark Ford, chief operating officer of BlueGrace Logistics, a Tampa, Florida-based logistics service provider (LSP) that manages less-than-truckload, truckload and multi-modal dry van, refrigerated and specialized flatbed freight for shippers.
LSPs are paying higher freight rates but are being inundated with business from shippers who are getting a high percentage of their load tenders rejected by contract carriers and dealing with other supply chain disruptions.
“Pretty much every shipper is forced to re-evaluate the way they do business,” said Will Kerr, president of Edge Logistics, an LSP headquartered in Chicago. “They are open to new ideas, technology, and new ways of thinking.”
Transportation and logistics providers that can bring capacity are in high demand. Increasingly, more are turning to new freight matching tools that connect them faster and more efficiently with carriers through “book it now” processes.
Carriers are benefitting from this trend by eliminating more phone calls, emails and manual steps to secure loads. A potential drawback of carriers having more automation, however, is they might be leaving money on the negotiation table. Then again, if the price is right, why negotiate?
Finding hidden capacity
Digital freight matching has accelerated the past year as LSPs are looking for capacity they otherwise would not have access to on their own.
BlueGrace Logistics has its own transportation management software (TMS) system and carrier sourcing team to match loads with trucks, but “it’s also good to have a combination of other platforms,” Ford said.
Edge Logistics has developed proprietary technology to stay connected with carriers and offer loads for instant booking.“We don’t rely on one method to cover any shipment,” he continued. “If you are only sourcing capacity one way, you are not providing maximum value to your customers.”
Recently, the company began using the Book-It-Now digital freight matching platform from Trucker Tools. BlueGrace already used Trucker Tools for load tracking, which is one of many features in the mobile app used by hundreds of thousands of owner-operators and small carriers.
Click here to read the entire article at Commercial Carrier Journal
Commercial Carrier Journal
Aaron Huff, CCJ senior editor
Sep 1, 2021
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