What is rail freight?

Rail freight is the process of transporting goods across land using trains specifically designed for cargo. This type of freight is pivotal in the logistics and shipping industry, offering a reliable and efficient method for moving large quantities of goods over long distances. By leveraging the extensive rail network, businesses can optimize their supply chain, reduce transportation costs, and minimize their environmental impact.

What types of freight can be shipped by rail?

Rail freight is versatile, accommodating a wide range of goods, including bulk commodities, intermodal containers, automotive vehicles, and more. Whether it’s agricultural produce, industrial materials, or consumer goods, rail freight provides a solution that is both scalable and secure, ensuring that different types of cargo reach their destination safely.

Here’s a closer look at the types of freight suitable for rail shipment:

• Bulk Commodities: These include items like coal, grain, and minerals, which are transported in large, loose quantities and benefit from the high-capacity conveyance rail offers.
• Intermodal Containers: Rail is key for moving these standardized shipping containers, which can be transferred seamlessly between ships, trains, and trucks, optimizing global trade logistics.
• Automotive Vehicles: Trains equipped with specialized car carriers transport vehicles efficiently, reducing wear and tear and exposure to the elements during transit. Freight railroads don’t typically ship personal vehicles.
• Chemicals and Hazardous Materials: Railroads are equipped to handle the safe transport of chemicals and hazardous materials, governed by strict regulations to ensure safety and environmental protection.
• Forest Products: Including lumber, paper products, and other wood-based materials, which are often shipped in bulk using rail due to their volume and weight.
• Construction Materials: Rail freight is ideal for moving large quantities of building materials like steel, cement, and aggregates, crucial for infrastructure projects.
• Food and Beverages: Railways can transport perishable goods quickly over long distances, with refrigerated cars ensuring that food and beverages arrive fresh.
• Consumer Goods and Electronics: Rail freight offers a secure and efficient method for distributing consumer products nationwide, from household items to high-tech electronics.

What are the benefits of rail freight shipping?

Rail freight shipping offers numerous advantages, such as cost-efficiency, especially for long-distance shipments, environmental friendliness due to lower carbon emissions compared to road transport, and high capacity, making it ideal for large-scale shipments. Additionally, its reliability and safety record make it a preferred choice for businesses looking to minimize risks in their supply chain.

Rail transportation offers a range of benefits tailored to both large enterprises and small-to-medium-sized businesses (SMBs), enhancing their logistics strategies and operational efficiency:

• Cost-Effectiveness: Rail freight is often more affordable for long-haul shipments, allowing businesses of all sizes to reduce transportation costs.
• Sustainability: With fewer greenhouse gas emissions per ton-mile than road transport, rail freight aligns with the environmental goals of companies committed to sustainability.
• Scalability: Rail can handle large cargo volumes, offering scalability for enterprise-level logistics operations and allowing SMBs to manage peak shipping periods efficiently.
• Reliability: Railways have scheduled routes and are less affected by traffic conditions, providing dependable transit times that benefit planning and inventory management for both large and small businesses.
• Safety: Rail transport offers enhanced safety for certain goods, particularly hazardous materials, reducing the risk of accidents and associated liabilities.
• Network Reach: Railways connect to major ports and urban centers, offering broad market access that supports the expansion goals of enterprises and the growth aspirations of SMBs.

Visit our freight shipping guide to learn more. 

How much does it cost to ship freight by rail?

The cost of shipping by rail varies depending on factors such as the type of goods, distance, and specific service requirements. Generally, contract rail freight is 26% more cost-effective for long-haul shipments and large volumes of cargo than OTR, providing businesses with a competitive edge in managing their logistics costs.

Rail freight vs. road transportation (OTR)

When deciding whether to use rail freight or intermodal transportation, various factors, including cost, speed, delivery requirements, and environmental impact, must be considered. Each mode has distinct advantages depending on the specific needs of the shipment.

Road trucking (Over-The-Road)

Over-The-Road (OTR) trucking is a crucial component of the transportation industry, offering door-to-door delivery and the flexibility to reach locations not directly accessible by rail. Some key advantages of OTR trucking include:

• Flexibility: Trucks can deliver goods to virtually any location, making them ideal for shipments requiring door-to-door service.
• Speed: For shorter distances, trucking often provides faster delivery times compared to rail, as it eliminates the need for intermodal transfers.
• Less Handling: Direct truck shipments involve less handling of goods, reducing the risk of damage or loss.

However, OTR trucking also has some drawbacks:

• Higher Cost: Trucking is generally more expensive per ton-mile than rail, particularly for long-distance and heavy shipments.
• Environmental Impact: Trucks emit more greenhouse gasses per ton-mile than trains, making them less environmentally friendly.
• Capacity Limitations: Trucks have smaller load capacities compared to trains, which can limit their efficiency for larger shipments.

Rail freight transportation

Rail freight is most effective for transporting large, bulk shipments over long distances. It is particularly cost-efficient for businesses that have direct rail access at both the shipping and receiving points and where delivery speed is not the highest priority. The key benefits of rail freight include:

• Cost-Effectiveness: Typically less expensive per ton-mile than OTR trucking, especially for heavy and bulk shipments.
• Environmental Benefits: Trains have a much lower carbon footprint compared to trucks, making rail a good choice for companies looking to reduce their environmental impact.
• Ideal for Bulky Goods: Perfect for items like coal, agricultural products, and other heavy commodities.

Like OTR, rail freight also has its disadvantages:

• Limited Flexibility: Rail freight is less flexible than road trucking, as it relies on a fixed network of rail lines and terminals. This can make it challenging to provide door-to-door service, especially for locations not directly served by rail.
• Longer Transit Times: Due to the need for intermodal transfers and the lower priority given to freight trains compared to passenger trains, rail freight often has longer transit times than road trucking, especially for shorter distances.
• Higher Infrastructure Costs: Building and maintaining rail infrastructure, such as tracks, terminals, and loading facilities, is more expensive than road infrastructure, which can impact the overall cost of rail freight transportation.

Intermodal transportation

Intermodal transportation, which combines the flexibility of trucks with the economic and environmental benefits of trains, is increasingly becoming a viable alternative to Over-The-Road (OTR) trucking alone. This method is excellent for shipments that require door-to-door delivery and faster transit times than what rail freight alone can offer. It is particularly advantageous in the following scenarios:

• Enhanced Flexibility: Useful for navigating areas without direct rail access by incorporating OTR trucking to complete the first and last legs of the journey.
• Speed and Efficiency: It offers quicker transit times than rail alone, as goods can be transferred swiftly between trains and trucks.
• Cost and Environmental Efficiency: This option provides a balance between cost-efficiency and reduced environmental impact, suitable for mid-range distances where direct rail access is not available.  It is generally 4x more efficient than OTR with up to 75% greenhouse gas emissions reduction.  

Rail freight solutions with Uber Freight

Uber Freight’s rail and intermodal services span North America and are rooted in exceptional customer service and expertise.  With access to 90,000 containers and strong relationships with all class 1 rail providers, we can arrange transport of your freight with the best combination of rates and routes, regardless of the railroad or container.  

Leveraging Uber Freight’s advanced tracking systems and predictive analytics, our rail freight solutions are designed to drive efficiency and visibility across your supply chain. With comprehensive coverage of North American RFID scanners, direct integrations with Class I and Class II/III railroads, and sophisticated telematics, we provide unparalleled tracking that keeps you in the know at every stage. Our dynamic ETAs, informed by real-time rail leg data and traffic congestion analysis, improve accuracy significantly.  

Connect with an expert for your rail shipping needs.  Choose a partner committed to modernizing the rail freight experience with cutting-edge technology, ensuring your cargo is always on the fastest track to its destination.

FAQs

Is it cheaper to ship by rail or truck?

Shipping by rail is generally more cost-effective for long-distance and high-volume shipments due to lower fuel costs and the ability to move large amounts of cargo in a single trip. However, the best option depends on specific shipment details and logistical requirements.

Can I ship a container by rail?

Yes, containers can be shipped by rail, leveraging the efficiency and scalability of intermodal transportation. This method combines the flexibility of road transport with the long-distance efficiency of rail freight, offering a comprehensive solution for containerized goods.

How can I ship by rail if I don’t have access to tracks?

Intermodal cargo transport and transloading bridge the gap between roadways and railways, providing seamless transitions for your shipments. Leveraging rail lines and direct rail access, these processes ensure that your goods smoothly shift from trucks to trains, enhancing connectivity and efficiency. Whether your cargo is rolling onto a train or transitioning at intermodal terminals, the combination of rail lines and direct rail access guarantees that your products are always en route to their destination seamlessly and efficiently, regardless of their path.

What is transloading?

Transloading is the process of transferring cargo between different types of freight vehicles, such as from rail cars to trucks, efficiently enabling goods to reach destinations not directly accessible by rail. This method leverages the strengths of different transportation modes, optimizing logistics, expanding access, and potentially reducing costs by combining the long-haul capabilities of rail with the flexibility of truck transport.

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In this guide, we’ll explore everything shippers need to know about trucking rates. As the soft freight market persists, shippers are seeing new opportunities to lock in lower rates and eliminate unnecessary trucking expenses. Shippers can achieve complete visibility into their carrier selection process and secure competitive rates by leveraging a transportation management system (TMS) and other digital logistics solutions.  

What is the average trucking rate in 2024 so far?

Trucking rates are the prices that carriers charge to transport freight from one location to another. They depend on various factors, such as freight supply and demand, fuel costs, distance, type of cargo, and seasonality. Carriers typically list trucking rates as “per mile,” so it’s important for shippers to know the distance between their starting point and delivery destination to calculate an accurate estimate. 

The type of truck needed to carry the load is equally important. Dry vans, reefers, and flatbeds all have different benchmarks, so shippers need to consider which type they need to get the most bang for their buck. 

Average dry van trucking rate

Dry vans are what most people imagine when thinking of freight trucks. They are used to transport dry goods in a non-temperature controlled trailer. As of May 2024, the average spot rate for a dry van was $2.02 per mile, or $2.44 per mile as a contract rate.

Average flatbed trucking rate

Flatbed freight trucks are flat, exposed trailers ideal for transporting large, heavy, or irregularly shaped loads that don’t need to be enclosed or don’t fit in the confines of a traditional enclosed dry van.  As of May 2024, the average spot rate for a flatbed truck was $2.53, or $3.13 per mile as a contract rate.

Average reefer trucking rate

Refrigerated trucks, also called reefers, are climate-controlled vehicles often used to transport produce, pharmaceuticals, and beauty products. Maintaining a set temperature means that reefers typically have higher per mile rates.  As of May 2024, the average spot rate for a refrigerated truck was $2.42 per mile, or $2.81 per mile as a contract rate.

What is influencing current trucking rates?

National average trucking rates are constantly fluctuating, so it’s important for carriers to keep a close eye on how the market evolves as well as understand the factors that can cause these shifts. 

Spot market rates are subject to change in real time, depending on freight supply and demand. An increase in rates may be driven by a number of persistent, industry-wide challenges in trucking, such as driver shortage, capacity constraints, and rising operational costs. Spot rates are typically lower than the contract rates, which are negotiated between shippers and carriers for longer-term agreements. While contract rates are also influenced by economic outlook, freight volumes, truck utilization, and inflation, they are typically more consistent. Shippers can take advantage of contract rates to avoid market volatility and ensure they have capacity available at a stable rate when they need it.

Spot and contract rates fall after January surge 

After experiencing a winter surge due to storms, national average van and reefer spot and contract rates fell in February and March. These rates typically reach their lowest point in April and May, before they’ll likely increase again due to annual events such as summer produce season. Meanwhile, flatbed spot rates continue to rise as the seasons change; flatbed contract rates likely hit their bottom in H2 2023. 

First tender acceptance hits all-time high—but could dip if contract rates fall

The state of spot and contract rates should also be of particular interest to shippers in Q2 and beyond, especially as they seek to plan and manage their budgets for the second half of the year. While spot and contract rates fell during February through April, contract rates remained flat and were 14% lower year-over-year. 

Historically, when contract rates fall, carriers reduce headcount, and eventually shippers could face rising spot rates and lower First Tender Acceptance (FTA) rates: the frequency with which first-awarded carriers accept shipment tenders. No matter the state of contract rates heading into H2 2024, shippers can maintain high FTA by building productive relationships at the lane level. Carriers are more likely to accept a tender the longer a rate has been in place, and benchmark a shipper’s network to pinpoint underpriced or overpriced lanes.

For further reading on current market conditions, check out Uber Freight’s Q2 Market Update. Shippers can learn more about the factors affecting trucking rates and immediate steps they can take to prepare for Q2 and beyond.

What factors go into the freight rate calculation

Freight trucking rates are meticulously calculated through a dynamic process that accounts for a number of factors. These variables work together to create a comprehensive pricing structure that accurately reflects the complexities of modern freight transportation.

Distance

Initially, the distance between the origin and destination serves as a foundational parameter, influencing the baseline cost due to fuel consumption, driver wages, and vehicle maintenance. Longer distances often result in higher rates due to increased fuel, maintenance, and labor costs associated with longer journeys.

Weight or volume

The weight or volume of the cargo being transported directly impacts the operational costs of transporting goods. Heavier loads necessitate more fuel consumption, increased wear and tear on the vehicle, and potential limitations on the amount of cargo that can be transported in a single trip, all of which contribute to higher rates to cover these additional expenses. Larger, bulkier items may occupy a significant amount of space, potentially limiting the overall capacity for other shipments and affecting the carrier’s ability to optimize their routes.

Freight class or type

The type of cargo being shipped and its classification according to industry standards (such as the National Motor Freight Classification) also play a role in rate determination. Different types of cargo have varying levels of difficulty in handling, potential for damage, and industry-specific requirements, which can affect pricing.

Other elements, including equipment, delivery urgency, prevailing fuel prices, tolls, and any supplementary services required, can also impact rates. Uber Freight’s algorithm adjusts in real time to fluctuations in the market, allowing shippers to access current rates they can lock in immediately—without risk of fluctuations down the line.

Uber Freight’s pricing algorithm accounts for factors like the day of the week, time of day, weather, and even seasonality. We also make sure to consider how quickly loads are being booked. If more loads are booked than normal, prices may decrease. If fewer loads are being booked than normal, prices may increase. Learn more about how Uber Freight’s pricing works.

How to estimate freight rates

Using the factors that affect freight trucking rates, shippers can estimate how much it will cost to deliver a specific load. 

1. Shippers should compile comprehensive details about the shipment, including the origin and destination addresses, dimensions, weight, and any special requirements or handling instructions.
2. Using the origin and destination addresses, shippers can estimate the mileage of the shipment. For a more accurate estimation, shippers should use precise mapping tools or software.
3. Paying close attention to any specific handling requirements, shippers can identify the most suitable type of equipment for the cargo, such as dry van, flatbed, or reefer. Different types have varying rate structures, with reefers often being the most costly.
4. Using a current average “per mile” rate for the region of shipment, shippers can estimate the overall cost to ship the goods from point A to point B. Because rates are fluctuating in real time, shippers should keep a close eye on how trends might affect their estimate.

For best results estimating a trucking rate, shippers can request and compare quotes from different brokerages and carriers.

Shippers looking for immediate information and results can leverage Uber Freight’s instant quote tool, which accurately calculates rates based on type of shipment and pickup and dropoff zip codes. The quote you receive is based on up-to-date market trends.  With our freight shipping services on Shipper Platform, you can lock in that rate instantly. Unlike traditional load-booking processes, no changes can be made to the rate once you secure it—the rate you book is the rate you pay.

Tips for getting the best trucking rate

Securing competitive trucking rates is crucial for shippers of all sizes to keep costs down and protect their bottom line. Digital tools can help businesses find the best rates, regardless of shipment type. Using Uber Freight’s Shipper Platform or TMS, shippers can access rates from multiple carriers, lock them in ahead of time, and build fruitful, long-standing relationships with their carrier partners and our logistics experts.

Plan ahead

Shippers should plan in advance to gain additional flexibility in rates and carriers. Last-minute shipments can lead to rush fees and limited carrier availability, potentially driving up costs. By planning ahead, you can explore different carrier options, negotiate effectively, and secure a better rate.

Using Uber Freight’s lane explorer tool, shippers can take a more proactive, strategic approach to their transportation process. It allows shippers to lock in rates up to two weeks in advance. They can even see rates across a 14-day window to select the best possible carrier for their shipment.

Explore multiple options

By comparing offers from different providers, shippers can gauge the market rate and be more selective. While the lowest quote might not always be the best option, shippers have the flexibility to evaluate other important variables like carrier reputation, service quality, and additional services provided. Weighing costs and benefits, shippers can choose the rate that offers them the best bang for their buck depending on the shipment details.

As one of the largest freight networks in the country, Uber Freight offers shippers access to multiple, instant carrier spot and contract quotes as part of our suite of shipper solutions, including our TMS. Shippers can choose from our network of carriers of all sizes across the country in our Shipper Platform or TMS—or collaborate with our team of experts to find the right fit for them. 

Build relationships

Building strong relationships with carriers can lead to more favorable rates over time. Regular shipping needs or a consistent volume of freight can indicate to carriers that you are a valued customer. Open communication, transparent expectations, and reliable payments help establish trust and loyalty with your shipping partners.

Uber Freight’s robust network of carriers on our platform wasn’t built overnight. Our team of experts has long-standing relationships with a variety of carriers. By deploying our managed transportation services, Uber Freight’s team becomes yours, allowing you access to transparent carrier rates.

Small and mid-sized businesses can also take advantage of Uber Freight’s network. Our rate lock tool allows shippers using the Shipper Platform to secure the same transparent rates as larger enterprises with a short-term commitment and the flexibility they need.

Finding the best rates with Uber Freight

Ready to take advantage of transparent carrier rates to drive your business forward? Uber Freight’s offerings connect you with a vast network of carriers, ensuring access to up front trucking rates that align with your budget. With accurate, real-time quotes and the power to compare options, Uber Freight empowers you to make informed decisions, optimize your logistics, and secure the best rates for your shipments. Sign up today to get an instant quote.  

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Originally referring to transport by humble, horse-drawn carts, today’s drayage is carried out by high-capacity trucks that efficiently move containerized cargo over short distances. This advancement has greatly streamlined processes, facilitating swift goods transfer without the need for unpacking and repacking. As a result, transit times and costs are reduced, enhancing overall efficiency.

What is drayage?

Drayage is a term used in the logistics industry to refer to transporting goods over a short distance, usually within the same city or metropolitan area. It is an essential part of the supply chain, connecting different modes of transportation and ensuring that products reach their final destination.

Drayage shipping is crucial for businesses of all sizes, whether they are large corporations or small startups. It allows companies to quickly move goods between ports, warehouses, and distribution centers, enabling them to keep up with customer demand and stay competitive in the market.

Types of drayage services

There are different types of drayage services available, depending on the specific needs and requirements of businesses.

Intermodal drayage

Intermodal drayage refers to the transportation of goods using multiple modes of transportation, such as trucks, trains, and ships. This method offers greater flexibility and efficiency in shipping goods over long distances. It also helps reduce costs and carbon emissions by utilizing different transport options based on their strengths.

Key Features:

• Completable within a single shift, forming a part of a longer haul in the shipping process.
• Apart from short goods transport, “drayage” holds other meanings within the industry. It can signify a vehicle pickup from or to an inland or border point, an intermodal terminal, or a seaport.
• Sometimes known as the charge on an invoice for such services, commonly applied in the container shipping sector for global trade.

Various scenarios call for its use. For instance, during a routine freight move involving multiple transportation modes like truck and rail, drayage takes place when the freight transitions from truck to train. Here, shipping documents are updated, and potentially, the freight may be reorganized (split or palletized) for its onward journey.

Pier / port drayage

Pier drayage refers to the movement of goods between a port, specifically a seaport, and an inland location. It is often used for importing or exporting large volumes of goods. It is a key component of ocean freight shipping to streamlining the movement through busy commercial ports.

Door-to-door drayage

Door-to-door drayage involves the pickup and delivery of goods from a business’s location to their final destination. This type of drayage is particularly useful for businesses that need to transport goods directly to their customers.

Intra-carrier drayage

Intra-carrier drayage refers to the movement of goods through drayage trucks within the same carrier’s network, such as between different warehouses or distribution centers. This type of drayage is often used for consolidating shipments and optimizing delivery routes.

Expedited drayage

Expedited drayage is a specialized service that offers faster delivery times for urgent shipments. This type of drayage may involve the use of dedicated vehicles and drivers to ensure timely delivery.

The importance of drayage in shipping

Drayage plays a crucial role in the freight shipping process, especially for businesses that rely on importing and exporting goods. Here are some reasons why drayage is important:

• Connecting different modes of transportation: Drayage helps bridge the gap between different types of transport, such as ships, trains, and trucks. This ensures that goods can be moved seamlessly from one mode of transportation to another, ultimately reaching their final destination.
• Time and cost savings: By using drayage services, businesses can save time and money by avoiding the need for multiple shipments or transfers between different carriers. This also helps reduce the risk of delays and damages to goods during transport.
• Access to specialized equipment: Drayage providers often have access to specialized equipment and vehicles, such as flatbeds or refrigerated trucks, that are necessary for transporting specific types of goods. This makes it easier for businesses to ship their products without having to invest in expensive equipment themselves.
• Flexibility and efficiency: Drayage services offer flexibility and efficiency, allowing businesses to adapt quickly to changes in demand or unexpected situations. With shorter distances involved, drayage also helps reduce the overall transit time for goods.

Get better control over port and rail drays with Uber Freight

Navigating through ocean port and rail ramp congestion and inefficiency demands a dependable drayage partner committed to excellence and cost efficiency.

Uber Freight offers customized port drayage services for all commercial ports and inland rail ramps that serve the US. Our vetted network of proven dray carriers can offer spot or year-round capacity to cater to diverse shipping needs. Our hands-on approach involves direct coordination with core regional and national carriers selected through our drayage carrier program including 20’, 40’, and 45′ options. With Uber Freight, take command of your port and rail movements and steer your business towards smoother, more cost-effective shipping horizons.

FAQs

What is the difference between intermodal and drayage?

Intermodal refers to the use of multiple modes of transportation, such as a combination of trucks, trains, and ships. Each intermodal rail shipment has a drayage move on each end.  Drayage, on the other hand, specifically refers to the short-distance transport of goods between these different modes of transportation.

What are some common challenges with drayage shipping?

Some common challenges with drayage shipping include port congestion, delays due to poor coordination between different carriers, and finding reliable drayage providers.

What is an example of a drayage move?

An example of drayage is the movement of a shipping container from a port to a nearby warehouse or distribution center. This type of short-distance transport is essential for connecting different modes of transportation and ensuring the smooth delivery of goods.

What is a drayage truck?

Drayage trucks are large semi-trailers and trucks that transfer shipping containers or bulk freight between various shipping facilities.

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In today’s rapidly evolving logistics industry, effective transportation management plays a pivotal role in optimizing supply chain operations. Managed transportation services are a strategic solution, helping shippers alleviate the complexities of moving goods from one point to another with efficiency. 

Managed transportation services are a comprehensive outsourcing solution wherein businesses entrust the planning, execution, and optimization of their transportation activities to a specialized third-party service provider. A multifaceted engagement that encompasses various services to streamline the transportation of goods, a managed transportation partnership removes the burden of transportation management from the shipper. Instead, an experienced, field-proven partner handles all aspects of transportation management. 

In the current landscape, where supply chains are becoming increasingly complex, managed transportation services can transform logistics operations. 

Understanding managed transportation services

At its core, a managed transportation service partnership entails the strategic outsourcing of transportation functions to expert service providers for optimized planning, execution, and control. These freight management services include carrier selection and negotiation, transportation procurement, route planning, load optimization, and more.

This strategic partnership extends beyond overseeing basic freight movement and encompasses a spectrum of activities designed to enhance efficiency, reduce costs, and ensure timely delivery. This arrangement allows businesses to focus on their core competencies while leveraging the expertise and resources of a dedicated transportation management partner.

One key component is a transportation management system (TMS), a software solution that acts as the central hub for managing and optimizing transportation-related activities. A strong TMS facilitates real-time visibility, route optimization, and performance analytics, contributing significantly to overall operational efficiency.

Additionally, managed transportation service providers can also operate as a freight brokerage, acting as an intermediary that connects shippers with carriers. This includes selecting the most suitable carriers for a particular shipment and negotiating contracts that align with the client’s goals and budget. Carrier selection and negotiation play a crucial role in optimizing costs, improving service levels, and mitigating risks associated with transportation.

Different types of logistics service providers (LSPs):

Third-party logistics providers (3PLs) offer outsourced logistics services, including transportation, warehousing, distribution, and freight forwarding. They may offer a range of services tailored to the specific needs of their clients. By outsourcing specific transportation activities to 3PLs, businesses can leverage their expertise, resources, and technology for more efficient and cost-effective logistics operations. 

While 3PLs use their own solutions to manage specific processes, such as shipping or warehousing, fourth-party logistics providers (4PLs) take full ownership of your logistics program, working with your team to optimize all aspects of supply chain management. 4PL providers go beyond the services offered by 3PL providers by managing and optimizing the entire supply chain on behalf of their clients, including overseeing multiple 3PL providers.

Logistics outsourcing plays a pivotal role in achieving economies of scale, no matter the kind of partner. By partnering with a logistics service provider (LSP), businesses gain access to consolidated transportation solutions that drive down costs. For instance, logistics partners can leverage proprietary, cutting-edge technology to enhance visibility and real-time tracking, allowing businesses to make informed decisions and adapt swiftly to evolving market dynamics. 

Benefits of managed transportation

The advantages of embracing managed transportation services include cost reduction, efficiency improvements, and enhanced visibility. Embracing a proactive approach, businesses can conduct a comprehensive cost-to-serve analysis, a critical tool in the world of supply chain management. Cost reduction strategies and key performance indicators (KPIs) can be integral components of the managed transportation framework. By aligning transportation strategies with overarching business goals, organizations can not only cut down on transportation costs but also enhance overall operational efficiency.

Managed transportation services bring logistics teams unparalleled efficiency improvements by streamlining processes and minimizing disruptions. By leveraging real-time shipment tracking, businesses gain granular insights into the movement of goods throughout the supply chain. Together with KPIs, this visibility enables businesses to make data-driven decisions, identify bottlenecks, and proactively address potential issues: in other words, businesses can drive performance improvements. 

Efficient transportation management is a result of the seamless integration of various components. By adopting managed transportation services, businesses can optimize route planning, reduce transit times, and mitigate the risk of delays, all contributing to heightened efficiency.

Core components of managed transportation

Managed transportation services require that service providers take over transportation activities on behalf of their client—but how? These key elements of managed transportation help ensure that service is smooth and seamless. 

Transportation management systems (TMS)

At the nucleus of managed transportation lies the transportation management system (TMS), a sophisticated entity designed to revolutionize the way businesses oversee and optimize their transportation processes. The TMS not only acts as a central hub for managing shipments but also encompasses features that span route planning, optimization, and fleet management solutions.

The integration of TMS with other logistics technologies, including warehouse management systems (WMS), creates a unified ecosystem where information flows seamlessly, facilitating synchronized decision-making from the C-suite to the distribution center. 

Read our guide to Transportation Management Systems (TMS) to learn more.  

Route optimization 

Route optimization is crucial in managed transportation services. Using real-time capacity and traffic data, route optimization algorithms enable companies to reduce costs, improve efficiency, enhance customer service, and minimize carbon emissions and fuel waste. 

Route optimization platforms help managed transportation services partners ensure that shipments are being moved as efficiently as possible, without deadhead. Meeting delivery deadlines consistently builds customer trust and loyalty, leading to higher satisfaction levels and repeat business for shippers using managed services. 

Carrier management

Well-managed carrier relationships are part of a streamlined and responsive supply chain. Trust and partnership with carriers can be bolstered when carrier management is handled by the managed service provider. These providers have more bandwidth for contact with carriers and can offer more responsive and immediate communication. 

Plus, effective carrier management involves ensuring that carriers meet all regulatory requirements and comply with safety standards. By carefully selecting and monitoring carriers, companies can mitigate risks associated with non-compliance or safety incidents.

Risk management

With dedicated compliance and risk management teams, managed services partners help shippers manage risk and create resiliency amid dynamic and unpredictable conditions. Service providers can liaise with all stakeholders and review historical and seasonal challenges to create a proactive contingency plan for unforeseen events. 

Freight audit and payment services 

By delving into the significance of freight audit and payment, businesses gain not only cost transparency but also enhanced control over their supply chain finances. And through robust compliance and risk management strategies, businesses can mitigate potential issues and foster a secure and controlled transportation environment. Because they have experience handling the complexities of freight shipping, including regulations, carrier contracts, and industry best practices, a managed services provider is an ideal choice for businesses looking to stay on top of audits and payments. And, dedicated internal staff can execute these processes with industry-specific context and expertise. 

Strategic partnership

Managed logistics service providers establish strategic partnerships with their clients by offering comprehensive solutions that go beyond basic transportation services. Working closely with clients to understand their supply chain requirements, business objectives, and challenges, LSPs can create tailored strategic plans that fuel business growth and transportation efficiency. 

Using tools like mode and route optimization, data and predictive analytics, and continuous improvement assessments, LSPs work to continually adapt transportation strategy as business goals evolve and market conditions shift. With dedicated internal analysts and strategists, these LSPs don’t just create and execute transportation plans: they serve as a close partner in driving the whole business forward, creating trust, collaboration, and mutual success.

Implementing managed transportation in your business

In the dynamic landscape of modern business, the implementation of managed transportation services has become a strategic imperative for companies seeking to enhance efficiency and optimize their supply chain operations. This transformative process requires a comprehensive evaluation of your transportation needs and aligning these with your overarching business goals.

Assessing your needs and goals

Before implementing transportation services, businesses must assess their transportation needs and set clear objectives. Evaluate your current approaches across workflows, paying attention to oft-neglected areas such as inventory management, distribution network design, and customer service. Is your transportation strategy aligned with business goals? If not, set this foundation now so that you begin your partnership on a strong foundation, or enlist the help of your managed services partner to do so. A partner with an experienced consulting and strategy team can help you realign strategy and engage in process improvement as they take over your shipping operations.  

Consider also what technology your partner might be able to provide that could help you better understand your transportation needs. For instance, companies that leverage advanced supply chain analytics can make more informed decisions, enhancing their ability to align transportation strategies with overarching business objectives. 

Selecting the right managed transportation provider

Choosing the right managed transportation provider is a critical step in this transformative journey. LSP, freight brokerage, and 3PL providers play pivotal, but different roles in delivering efficient transportation solutions. 

Freight brokerages are the least involved type of partner, specializing in connecting shippers with carriers. Logistics service providers, or LSPs, include both 3PL and 4PL partners. While 3PL providers take over order fulfilment, including warehousing, packing, and shipment, 4PL providers are end-to-end partners that manage the entire supply chain. 

First and foremost, seek a provider that understands the needs of your industry. This context and understanding will form the foundation of your trust, as your partner will be able to give you the most helpful advice for a given situation. Also look for cutting-edge technology to streamline operations, and exemplary customer service to ensure a seamless collaboration.

Transitioning to a managed transportation model

Once the right managed transportation provider is selected, the transition to a managed transportation model requires a systematic approach. This involves integrating supply chain processes, managing change effectively, and providing adequate training and support. Common challenges associated with the transition include data cleaning and validation, redundant processes and workflows, and internal alignment. 

To address these challenges, invest in supply chain integration, change management, and comprehensive training and support. Effective change management strategies are crucial to overcoming resistance to change within the organization, ensuring a seamless flow of information between all stakeholders. When the implementation goes smoothly, a cohesive and efficient transportation system follows. 

Advanced strategies in managed transportation

Sustainable transportation practices:

Sustainability is a growing priority in the logistics industry, as heralded by the growth of green logistics. Managed transportation services can contribute to sustainable practices by incorporating eco-friendly practices, such as utilizing electric vehicles, optimizing delivery routes to minimize fuel consumption, and implementing packaging strategies to reduce waste. These principles don’t just matter to the earth: the long-term advantages extend beyond environmental stewardship to cost savings and enhanced brand reputation.

Leveraging data and analytics:

Data and analytics play a pivotal role in driving decision-making within transportation services. Supply chain analytics provides invaluable insights into the performance of transportation processes, enabling companies to identify bottlenecks, optimize routes, and enhance overall efficiency. KPIs serve as benchmarks for success, allowing businesses to measure and improve their transportation operations continually. And real-time tracking and visibility, facilitated by advanced technologies, empower organizations to make data-driven decisions, ensuring timely and transparent transportation processes.

Innovations in managed transportation technology

Innovation continues to accelerate, and logistics is no exception. New technologies like artificial intelligence (AI), the internet of things (IoT), and blockchain offer unprecedented functionalities to shippers. 

For instance, AI-powered logistics now has a variety of use cases, including streamlining logistics operations, optimizing route planning, and predicting maintenance needs. IoT enhances real-time tracking, providing granular visibility into the movement of goods. And blockchain for supply chain ensures transparency and security in supply chain transactions, mitigating risks associated with compliance.

The future of managed transportation

Managed transportation services have become a pivotal tool for businesses seeking to optimize their logistics operations. By understanding the core components, benefits, and advanced strategies, companies can harness the power of transportation services for sustainable growth.

As the logistics industry continues to evolve, embracing transportation services will be imperative for businesses aiming to stay competitive. The strategic value of transportation services, coupled with the adoption of innovative technologies, will shape the future of logistics, driving efficiency, sustainability, and overall business growth.

At Uber Freight, we understand that choosing the ideal partner to outsource your logistics is a consequential choice for your business. Taking the time to thoroughly explore your options and prepare your company for change will ultimately help you improve service and reduce costs for the long term. Interested in outsourcing your transportation operations in 2024? Our teams have the resources and guidance you need: connect with an Uber Freight expert today. 

Additional resources:

• CSMP Managed Transportation Guide
• 8 KPIs transportation management leaders are prioritizing this year
• A buying guide to outsourcing transportation management: What to consider when investing in solutions

The post A guide to managed transportation services appeared first on Uber Freight.

In this article, we will guide you through the intricacies of international freight shipping, providing valuable insights and tips to help you navigate this dynamic industry.

What is international freight?

International freight is transporting goods across borders from one country to another. It plays a crucial role in global trade and commerce, allowing businesses to reach customers worldwide and expand their markets. International freight can be transported via various modes such as air, ocean, road, or rail.

How does international freight work?

International freight shipping involves coordinating various parties, including shippers, carriers, customs agents, and receivers. It encompasses several stages: documentation, customs clearance, cargo handling, transit, and final delivery. Each stage presents unique challenges that require careful planning and execution to ensure a smooth and efficient shipping process. Below, we dive into each stage and the common processes involved.

1. Export haulage:

The journey begins with export haulage, moving the freight from its origin to the nearest warehouse, port, or facility. This includes:

• Shipment Planning: Optimizing routes and transport methods for efficiency.
• Loading and Handling: Ensuring goods are securely packed for transit.
• Drayage: Employing local trucking to move the cargo to the initial loading dock.

2. Export Customs Clearance:

As the freight reaches the border, export customs clearance is necessary to comply with international regulations before departure:

• Documentation Preparation: Gathering all necessary shipping and customs documents.
• Customs Brokerage: Using professional brokers to navigate complex customs procedures.
• Duties and Taxes: Handling financial obligations related to export.
• Security Inspections: Ensuring cargo meets all export security standards.

3. Transportation:

Following successful customs clearance, the transportation phase starts, varying by selected logistics options and customer preferences:

• Mode Selection: Deciding whether air, sea, or land transport suits the shipment’s needs.
• Freight Consolidation: Merging smaller loads for economic efficiency.
• Carrier Management: Coordinating with carriers to guarantee timely delivery.
• Safety Measures: Securing the freight against tampering and loss during travel.

4. Import Customs Clearance:

Upon arrival at the destination country, import customs clearance must be handled to ensure the freight complies with local laws:

• Import Licensing: Securing permits required for importation.
• Tariff Payment: Calculating and paying necessary tariffs.
• Regulatory Compliance: Adhering to local standards for safety and quality.
• Document Verification: Providing necessary documentation for customs checks.

5. Import Haulage:

The final step involves import haulage, moving the freight from the border to its ultimate destination:

• Last Mile Delivery: Planning the last segment of delivery to ensure prompt arrival.
• Unloading: Managing the offloading process at the final stop.
• Delivery Confirmation: Confirming that all goods have been received in proper condition.
• Post-Delivery Support: Addressing any subsequent issues and maintaining customer satisfaction.

Tracking your international shipment

To track your international shipment and gain visibility into its progress, there are several steps Shipper’s can take:

• Obtain the tracking number: Upon booking your shipment, the freight forwarder or carrier will provide you with a unique tracking number, such as a Bill of Lading (BOL) number for ocean freight or an Air Waybill (AWB) number for air freight.
• Check with your freight forwarder: Your freight forwarder should have access to the latest information on your shipment’s status. They can provide you with updates on customs clearance, departure and arrival times, and any potential delays.
• Use online tracking tools: Many carriers and freight forwarders offer online tracking tools where you can enter your tracking number to get real-time updates on your shipment’s location and status.
• Monitor port and terminal information: Keep an eye on the status of the ports and terminals involved in your shipment’s journey. This information can help you anticipate any potential delays due to congestion or operational issues.
• Set up automated alerts: Some tracking systems allow you to set up automated alerts via email or SMS, notifying you of key milestones in your shipment’s journey, such as departure from origin, arrival at destination, and customs clearance.

With Uber Freight’s TMS, shippers can easily track international shipments and streamline logistics. We integrate data from 40+ sources, covering 99% of global shipments. Our user-friendly TMS software provides detailed, real-time visibility without any complex setup.  Our TMS platform offers additional benefits like optimizing routes, consolidating loads, and simplifying documentation.

Transportation modes for international shipping

One of the keys to successful international freight shipping is choosing the best methods for a shipper’s specific needs.

Air freight

Air freight is the quickest way to transport goods internationally, making it suitable for time-sensitive shipments. It involves loading cargo onto an aircraft and flying it to its destination. Air freight can be expensive compared to other modes of transportation but offers fast transit times and reliable delivery.

• Speed: Air freight is the fastest shipping method for international shipments. It’s ideal for perishable goods or emergency deliveries.
• Efficiency: Due to airlines’ strict schedules, air freight can often provide accurate arrival and departure times.

Ocean freight

Ocean freight is the most commonly used method for international shipping, especially for large and heavy cargo. It involves loading cargo onto a ship and transporting it across the ocean to its destination. Ocean freight is more cost-effective compared to air freight but offers longer transit times.

• Cost-effective: Ocean freight is generally more affordable than air freight, making it ideal for large and heavy shipments.
• Eco-friendly: Ocean freight is a more environmentally friendly option compared to air freight, as it has a lower carbon footprint.

Rail freight

Rail freight is a popular option for international shipping, especially for goods traveling between neighboring countries or continents. It involves loading cargo onto specially designed railcars and transporting it across land to its destination. Rail freight offers cost-effective rates and relatively fast transit times.

• Reliability: Rail freight has fixed schedules and routes, making it a reliable option for long-distance shipping.
• Cost-effective: Rail freight is often more cost-effective than road or air freight, and it can handle larger volumes than air freight.

Intermodal freight

Intermodal freight is a transportation method that involves using multiple modes of transport, such as ships, trains, and trucks, to move goods from one point to another. This approach allows for the efficient and cost-effective transportation of cargo over long distances, combining the strengths of various modes of transport.

• Flexibility: Intermodal freight offers flexibility in routing and scheduling, allowing for the optimization of transit times and costs based on the specific needs of the shipment.
• Efficiency: By utilizing the most suitable mode of transport for each leg of the journey, intermodal freight can minimize handling and reduce the risk of damage to the cargo.
• Cost-effective: Intermodal freight can be more cost-effective than relying on a single mode of transport, as it allows for the consolidation of shipments and the use of the most economical mode for each segment of the journey.
• Environmental benefits: Intermodal freight can reduce the overall carbon footprint of the transportation process by leveraging more environmentally friendly modes of transport, such as rail or sea, for the majority of the journey.

Intermodal freight, with the help of drayage services, is particularly useful for international shipments that require the movement of goods across multiple countries or continents.

Key participants in international freight

Various parties are involved in international freight shipping, each playing a crucial role in ensuring the smooth transportation of goods across borders.

OTI (Ocean Transportation Intermediary)

OTIs are ocean transportation intermediaries licensed by the Federal Maritime Commission (FMC), which include Non-Vessel-Operating Common Carriers (NVOCCs) and Ocean Freight Forwarders (OFFs).

NVOCC (Non-Vessel Operating Common Carrier)

NVOCCs, or Non-Vessel Operating Common Carriers, play a crucial role in international freight shipping. They act as intermediaries between shippers and carriers, providing ocean shipping services by leasing space from vessel operators. Unlike traditional freight forwarders, who also offer air and land transportation services, NVOCCs specialize in ocean freight. They handle all the necessary paperwork and documentation for shipping goods internationally, making it easier for shippers to navigate complex customs regulations, but do not operate the vessels by which they transport.

OFF (Ocean Freight Forwarder)

OFFs are freight forwarders located in the US that specialize in ocean freight. US ocean freight forwarders are licensed by the Federal Maritime Commission to offer services such as arranging ocean transportation from the US to foreign destinations, booking cargo space, consolidating shipments, preparing documentation, and performing other related activities for such shipments on behalf of shippers.

International freight forwarders

Freight forwarders are companies that help businesses arrange transportation for their goods. They can handle all aspects of the shipping process, from coordinating with carriers to managing documentation and customs clearance. Freight forwarders act as an extension of the shipper’s logistics team and often have established relationships with different carriers to secure competitive rates for their clients.

Customs brokers

Customs brokers are licensed professionals who assist importers and exporters in navigating complex international trade regulations and customs procedures. They work closely with customs officials to ensure that necessary documents are filed correctly, duties and taxes are paid, and goods are cleared for entry into the country.

As part of our comprehensive international shipping services, Uber Freight operates as an OTI, NVOCC, OFF, and customs broker.  This diverse range of services ensures that we help shippers simplify their shipping operations.

International freight shipping with Uber Freight

Uber Freight can help keep your supply chain seamlessly moving across the border regardless of your transportation method. Our international transportation management team offers a tailored freight management solution that aligns perfectly with your business objectives.
Our international shipping services include:

• Global transportation management
• Freight forwarding (NVOCC, OTI, OFF)
• Customs brokerage and compliance
• Ocean and air freight
• Customized drayage
• Operations technology integration
• Ocean and air tracking and visibility
• Procurement and benchmarking

Recognizing the uniqueness of each customer, our team of CTPAT-certified, multilingual international logistics experts, which includes licensed custom brokers and import/export specialists, focus on crafting a personalized, technology-driven solution. Dedicated account teams seamlessly execute your day-to-day global transportation and compliance needs.. Connect with an expert today!

FAQs

How do international freight forwarding companies work?

International freight forwarding companies act as intermediaries between shippers and carriers, helping businesses arrange transportation for their goods across borders. They handle all aspects of the shipping process, including negotiating with carriers, managing documentation and customs clearance, and ensuring timely delivery of goods.

What is the difference between international freight and cargo?

International freight refers to the transportation of goods between countries, while cargo refers to the actual goods being transported. International freight encompasses various methods of shipping, such as air, ocean, and rail freight. Cargo can include anything from consumer goods to raw materials being shipped internationally.  So essentially, international freight is the process of moving cargo across borders.

How much does international freight shipping cost?

Determining international freight shipping costs is complex and varies based on transportation mode (air, sea, rail, road), cargo weight, dimensions, goods type, and distance. Factors like tariffs, customs fees, and service charges on specific routes impact pricing.

How long does international shipping take?

The transit time for international freight shipping depends on the mode of transportation chosen, the origin and destination countries, and other factors such as customs clearance. Air freight is generally the quickest option, with transit times ranging from 1-7 days, while ocean freight can take anywhere from 10-60 days. Rail freight falls somewhere in between, with an average transit time of 15-20 days.

The post A guide to international freight shipping appeared first on Uber Freight.

The demand for flatbed trucking services is rising due to the growth of the construction, manufacturing, and oil industries. However, as with any transportation method, there are pros and cons to consider when using flatbed trucks.

What is flatbed trucking?

Flatbed trucking is a method of transportation that involves using an open-bed trailer to transport goods. This type of trucking gets its name from the trailer’s flat, level “bed,” which makes loading and unloading goods easier than traditional trailers with enclosed sides.

Flatbed trucking is a popular method of transportation for non-commoditized products and equipment types. These include materials that can be loaded from the side using a crane or forklift and those that are not fragile and can be exposed to the elements during transport. This makes flatbed trucking ideal for transporting raw materials, construction materials, and industrial goods.

Flatbed transport is also highly effective for moving shipping containers. These trucks transport containers from inland ports or factories to seaports, where they get loaded onto ships. Flatbed trailers are capable of transporting super sacks and industrial fabric bags holding up to 2,000 pounds of dry products like sand, fertilizer, or seeds.

When to use flatbed trucking

Flatbed trucking is particularly suited for transporting oversized or irregularly shaped items that do not fit within the constraints of standard enclosed trailers. This mode allows for easy access during loading and unloading—cranes and forklifts can freely operate around the cargo, significantly reducing labor costs and expediting the process. However, the open nature of flatbeds exposes goods to environmental factors, thus requiring robust protective measures like tarps and secure strapping to shield against weather-related damages.

For example, consider a scenario where large construction beams need to be transported from a manufacturing site to a building project across the state. Flatbed trucking would facilitate the direct loading and unloading of these beams, streamlining the process significantly. Strategic route planning would also come into play to avoid low bridges or heavy-weight restrictions, optimizing fuel consumption despite the flatbed’s vulnerability to wind resistance. 

Pros & cons of flatbed trucking

Flatbed trucking has its own set of advantages and disadvantages, which we will discuss below.

Pros

There are several advantages of using flatbed trucking as a transportation method:

• The versatility, capacity, and accessibility of flatbed trailers make them a preferred choice for full truckload (FTL) shipping, particularly when transporting large, heavy, or irregularly shaped cargo that do not fit in standard trailers.
• With no sides or roof, flatbed trailers offer easy access to the cargo, making it easier and faster to load and unload goods. This saves time and reduces the risk of damage during loading and unloading.
• Flatbed trailers are built to withstand heavy loads and harsh road conditions. This makes them a reliable option for transporting goods that are susceptible to damage from vibration or impact.
• Despite being traditionally favored for large or irregular loads, flatbed trucking also offers remarkable flexibility for transporting LTL shipments alongside other cargo.

Cons

Flatbed freight planning often can be complicated, fragmented, and time-consuming. This is largely due to flatbed loads’ varying sizes, dimensions, and weight. Other potential disadvantages include:

• Unlike enclosed trailers, flatbed trailers do not offer protection from weather conditions. This makes them unsuitable for transporting goods that are sensitive to moisture or extreme temperatures.
• While flatbed trucks offer easy access to cargo, loading and securing large or oddly shaped items can be challenging. This requires specialized equipment and expertise, which may increase the overall cost of transportation.
• Due to the trailer’s open design, flatbed truck driving can be more challenging and requires skilled drivers. Maneuvering on highways or through tight spaces can be difficult, making it a potentially risky transportation option.

Managing broad carrier compliance and networks as a shipper can be risky – Uber Freight holds the largest long-tail network in the nation. With thousands of real-time data points, Uber Freight has the most accurate flatbed pricing index for both spot and contractual needs.

Types of flatbed truck trailers

Flatbed trailers typically span from 48 to 53 feet in length, with a standard width of around 8.5 feet. These trailers can generally transport cargo weighing up to about 48,000 pounds. Remember, these are rough estimates; the actual dimensions and capacities may vary based on the specific trailer design.

• Standard Flatbed Trailer: This is the most commonly used type of flatbed trailer, featuring a simple and straightforward design with a flat loading area and no sides or roof.
• Step Deck Trailer or Drop Deck Trailer: Drop decks have two upper and lower deck levels to accommodate taller loads that do not exceed the maximum legal height.
• Extendable Flatbed Trailer: As the name suggests, these trailers can be extended in length to accommodate unusually long or oversized cargo.
• Conestoga Trailer: This type of flatbed trailer has a retractable tarp system, providing protection similar to an enclosed trailer. It is ideal for transporting goods that are sensitive to weather conditions.
• Lowboy Trailer (Double Drop Deck): These trailers have a lower deck height, making them suitable for hauling taller items such as heavy machinery.
• Removable Gooseneck (RGN) Trailer:  These trailers have a detachable front end, allowing for easy loading and unloading of heavy equipment.
• Hot Shot Trailer:  Short trailers that can be hauled by Class 2 pickup trucks.  These trailers are usually 20’-40’ and run at a lower cost per mile than standard flatbed trailers. 

Flatbed shipping tips

Here are some tips for shippers to ensure a smooth and successful shipping experience when shipping with flatbed equipment:

• Optimize load planning, focusing on maximizing space and ensuring safety. Consider cargo dimensions and weight distribution to prevent overloading and ensure compliance with road safety regulations.
• Establish and maintain strong relationships with a network of reliable carriers. This can lead to more favorable rates, better service levels, and access to capacity during peak times.
• Ensure flatbed truck drivers are following safety protocols and best practices for securing and transporting loads. This is crucial to prevent accidents and ensure cargo’s and others’ safety on the road.
• Use analytics to gain insights into shipping operations. Analyzing data on shipping patterns, carrier performance, and costs can help identify areas for improvement and inform strategic decisions.

Shipping flatbed with Uber Freight

Ready to take advantage of a robust network that simplifies your flatbed shipping needs? With Uber Freight’s extensive carrier base of over 500 flatbed providers, dedicated truck management for account-specific needs, and capabilities for oversized loads, we’ve got your freight covered. Harness our $500M+ network volume and experience the ease of project management and job site delivery.

Our specialized flatbed solutions include arranging:

• Heavy Haul Services: For loads exceeding 46,000 pounds, with a total combined weight capacity of up to 80,000 pounds for truck and trailer.
• Specialized Freight Needs: Catering to shipments that require custom critical equipment, enhanced insurance protections, and third-party clearances, perfect for high-value and super loads.
• Over-Dimensional Freight: Expert handling of goods that exceed the standard dimensions for regular flatbed transportation
• Hot Shot Deliveries: Fast, efficient service for urgent shipments

From initial project quotations and carrier selection to detailed pre-planning, execution, and post-delivery debriefing, our thorough process ensures meticulous management of your shipment every step of the way. Elevate your flatbed trucking experience with Uber Freight’s robust solutions and connect with an expert today to move your freight with confidence.

Shippers can also sign up on Uber Frieght’s Freight Shipping Services online booking platform to get an instant quote and book a 48’ flatbed load today.  

The post The pros & cons of flatbed trucking appeared first on Uber Freight.

Freight shipping involves the transportation of large or bulk volumes of products. It covers various distances, from short local deliveries to long international hauls. Unlike smaller parcel or package shipping, freight shipping is designed for heavier shipments. Specifically, it handles goods weighing over 150 pounds and can accommodate loads up to 15,000 pounds. This capability makes freight shipping a key component in the management of supply chains and in facilitating global trade.

How do freight shipments travel?

Freight shipments travel by five primary modes of transportation:

1. Road transportation

Road transportation refers to freight movement using motor vehicles on roads and highways. Road transportation is the most common mode of freight shipping due to its flexibility, accessibility, and cost-effectiveness. It is suitable for both short-distance and long-distance transportation within a country or across borders.

The types of trucks commonly used in road transportation are:

• Dry vans: These are enclosed trailers used for shipping dry goods such as electronics, clothing, and machinery.
• Refrigerated trucks: Also known as reefer trucks, they are used to transport temperature-sensitive cargo like food and pharmaceuticals.
• Flatbeds: These are open trailers with no roof or sides, making it easy to load and transport large or odd-sized items such as heavy equipment, building materials, and machinery.

Types of Shipments: Ideal for both FTL and LTL, flexible for short to medium distances.

• Pros:
  • High flexibility in routes and scheduling.
  • Ideal for door-to-door deliveries.
  • Wide availability of providers.
• Cons:
  • Susceptible to delays due to traffic and weather conditions.
  • Limited by weight and size restrictions.

2. Rail transportation

Rail transportation is the movement of freight using trains on a network of rails or tracks and is widely used for long-distance and intermodal freight shipping.

Types of Shipments: Best for large, bulky goods and bulk commodities over long distances.

• Pros:
  • Cost-effective for large shipments.
  • Less affected by weather and traffic conditions compared to road transport.
  • Eco-friendlier than road transport.
• Cons:
  • Less flexibility in pickup and delivery points.
  • Longer transit times than road transport.

3. Air freight

Air freight involves the transportation of goods via air carriers, including commercial airlines and dedicated cargo airlines. Air freight is best suited for time-sensitive or perishable shipments. It is also used for shipping high-value items such as electronics and pharmaceuticals.

Types of Shipments: High-value, perishable goods, or urgent shipments.

• Pros:
  • Fastest transport method for long distances.
  • Reliable and secure.
• Cons:
  • Most expensive mode of transport.
  • Subject to strict regulations and limited by airport locations.

4. Sea/ocean freight

Sea/ocean freight is the transportation of goods by ships across oceans and seas. Sea freight is commonly used for international shipments and transporting bulk commodities such as oil, ores, and grains. It is also utilized for intermodal shipping since large cargo can be loaded onto trains or trucks from ports.

Types of Shipments: Full-container load (FCL), Less-than-container load (LCL), Roll-on-roll-off (Ro-Ro), and Break-bulk.

• Pros:
  • Cost-effective for bulk and heavy goods.
  • Large capacity.
• Cons:
  • Slowest mode of transport.
  • Vulnerable to weather conditions and port delays.

5. Intermodal freight

Intermodal freight shipping is the practice of using more than one mode of transportation to move goods from origin to destination. Intermodal shipping offers a cost-effective and efficient option for moving large volumes of cargo. It combines the advantages of different modes of transport, such as rail’s long-distance hauling capabilities and trucking’s flexibility in pickup and delivery points.

Types of Shipments: Express intermodal, ocean intermodal, surface intermodal

• Pros:
  • Offers a balance of speed, cost, and environmental benefits.
  • Flexible and can be tailored to specific needs.
• Cons:
  • Requires precise coordination.
  • Potential for delays during mode transfers.

How to ship freight

Choosing a transportation mode

To begin with, determining specific shipping needs based on the freight’s origin, destination, and characteristics is essential. This initial step guides shippers in selecting the most suitable mode of transport, which can vary from single-mode to multi-modal options, combining air, sea, rail, and road transportation as well as LTL vs FTL shipping modes. The choice of transportation mode is influenced by factors such as the type of cargo, urgency, and cost-effectiveness, and is categorized into the segments listed here. 

• LTL: Less than truckload (LTL) is utilized when shipping freight volume larger than parcel but not big enough to fill a full trailer. LTL freight shipping is employed for shipments ranging from 150 to 15,000 pounds.
• FTL: Full truckload (FTL) is used for both bulk loads or pallets that will fill up an entire trailer. These can be a minimum weight of 15,000 pounds. FTL is mostly utilized as long-haul and if the shipper has enough cargo to fill the entire trailer. 
• Partial Truckload: Also referred to as consolidated shipping, this involves splitting the cost of a truck with other shippers to save costs and improve the use of available capacity. It’s used when a shipment is over 5,000 pounds or 6 pallets.
• Intermodal: Intermodal shipping seamlessly combines rail, truck, air, and ocean freight to move goods efficiently. By leveraging the strengths of each mode, it offers flexibility, cost-effectiveness, and environmental sustainability. This coordinated approach minimizes transit times, reduces costs, and lessens environmental impact. It is ideal for long-haul journeys and large-scale logistics operations.
• Expedited Freight: This type of transportation is generally employed to transport time-sensitive or spoilable cargo that has to be delivered as fast as possible. Accelerated freight traditionally involves air transport or trucks.

After identifying the appropriate mode of transport, the next critical phase involves preparing the necessary shipping documents. This step is pivotal in ensuring a smooth transition to the actual movement of freight. 

Preparing shipping documents

Effective management of essential documents, including the bill of lading, freight bill, packing list, and commercial invoice, ensures efficient shipping operations when transporting freight. Failure to organize these documents properly could result in delays, penalties, late fees, or additional costs.

Here is a list of the essential shipping documents shippers might need when shipping freight:

• Bill of Lading (B/L): This document sets the terms between shippers and the transportation company.
• House Air Waybill (HAWB): Identifies a single shipment.
• Master Air Waybill (MAWB): Used for consolidating several house air waybills.
• Sea Waybill: Acts as a contract of carriage and receipt of goods.
• Commercial Invoice: Details the transaction and is vital for duties and taxes.
• Shipper’s Letter of Instruction (SLI): Instructs how the shipment is handled.
• Electronic Export Information (EEI): Required for US exports over US$2,500.
• Certificate of Origin: Defines the goods’ origin.
• Hazardous Materials/ Dangerous Goods (HAZMAT): Required for substances posing risks during transport.

Packaging freight

Packaging is a critical element when shipping freight. It ensures cargo reaches the final destination in peak condition. Various types of packaging, including pallets, crates, drums, and shipping containers, offer different levels of protection and suitability for different types of cargo. Logistics teams also need to factor in proper cushioning, dunnage, and protective materials like bubble wrap or foam padding when transporting freight. By investing in quality packaging, shippers can reduce the risk of costly accidents and delays during freight shipping quotes.

Calculating freight costs

Various freight factors impact how freight costs are calculated.

• Weight and Volume: The weight and volume of the cargo directly impact transportation costs. Freight rates are often based on weight, with heavier shipments costing more to transport. Additionally, bulky or oversized cargo may require specialized handling and equipment, leading to higher shipping costs.
• Freight class: For less than truckload (LTL) shipments, freight class plays a significant role in determining costs. The National Motor Freight Classification (NMFC) system assigns a freight class to goods based on factors such as density, stowability, handling, and liability.  Each freight class has its own pricing structure, with higher classes generally commanding higher shipping rates.  Shippers can determine a cargo’s freight class by using Uber Freight’s Density Calculator.
• Urgency: How quickly freight is needed to ship and reach the destination impacts both modes of transportation and the cost of freight. Shippers will likely pay higher costs when freight needs to ship urgently. Planning freight shipping can help optimize costs and ensure reliable transportation.
• Mode of Transportation: Typically, air freight is acknowledged as the priciest mode of transportation, while ocean freight is the most economical. Shippers have the opportunity to enhance both speed and cost-effectiveness by selecting intermodal modes. Moreover, if freight necessitates specialized handling, such as temperature control, shipping expenses may also escalate.
• Distance: The farther the distance a shipment needs to travel, the higher the freight cost is likely to be due to the increased fuel, labor, and equipment expenses associated with longer journeys.  Moving freight between two locations is not always a straight line, and thus optimizing the route is crucial to keeping shipping costs in control. An experienced 3PL can help shippers optimize shipping in this case. 
• Seasonality: Seasonality can lead to fluctuations in freight costs due to changes in demand, capacity constraints, weather conditions, fuel prices, and operational challenges. Shippers should anticipate seasonal variations and plan their logistics and supply chain strategies accordingly to mitigate the impact on freight costs.

By understanding the key factors that impact freight costs, shippers can make informed decisions to optimize their logistics and supply chain strategies.  Keep in mind that freight costs can vary based on numerous factors, so it’s essential to obtain rate quotes and consider all relevant factors before finalizing shipping arrangements.

Insuring freight

Insuring cargo against loss or damage is important to protect shipping businesses from unforeseen circumstances. Cargo insurance coverage options vary in scope and cost, ranging from basic liability coverage to comprehensive cargo insurance policies. Freight and carrier liability insurance covers several shipping needs, but does not cover concealed damages or losses due to inadequate packing. Insurance can give shippers peace of mind and financial security in the event of a mishap.

Booking Freight

Scheduling a pickup is the final step in the freight shipping process. It involves arranging for the carrier to pick up the cargo at a specific time and location. Before this, it’s crucial to get quotes and select a suitable carrier based on specific shipping needs and budget. This can be done through various methods such as phone, email, or online freight shipping services platforms like Uber Freight’s Shipper Platform.

When scheduling a pickup, make sure to provide detailed information about the shipment, including dimensions, weight, and any special handling instructions. This will help ensure a smooth pickup process and avoid any delays or additional fees. It is also important to communicate with the carrier about any specific requirements, such as loading/unloading procedures or time constraints at the pickup location.

Tracking freight

Throughout the process of freight shipping, it’s important to stay aware of where the freight is at all times before delivery. Visibility into freight movement helps improve operational efficiency, enabling shippers to reroute shipments, ensure documents are in order, and check up on freight status. Real-time freight tracking and visibility solutions like Uber Freight’s Shipper Platform can help shippers stay on top of their transportation game. 

Tech tools like Transportation Management Systems offer deep, granular awareness of shipments in real-time. These systems give shippers access to several tools for managing freight transportation, including route optimization, load planning, carrier selection, and performance monitoring. For instance, Uber Freight’s TMS solution provides shippers with easy tools and the technology needed to automate and optimize their logistics processes, improving efficiency and reducing costs.

Choosing a freight shipping company

Choosing the right company based on transportation needs is crucial. Shippers can shortlist and select freight shipper partners to suit their unique requirements by looking into aspects like: 

• Transportation modes offered
• Service areas
• Technology capability
• Cargo handling capability

Our freight shipping services platform stands out for its user-friendly interface and comprehensive suite of digital tools, empowering shippers to manage logistics operations with ease and efficiency.

Shipping freight with Uber Freight

Whether you’re a small business or a large enterprise, we have the software and solutions that you can tailor to your business’s freight shipping needs.  Our unique combination of expert-led partnerships, leveraging AI-assisted intel, and the largest capacity marketplace, delivers next-generation logistics across the supply chain.

Sign up on Shipper Platform to book a load today or connect with one of our experts to learn how we can help you make the most of your logistics and transportation operations.

The post A guide to freight shipping in 2024 appeared first on Uber Freight.

Updated May 8, 2024

As we round out the first half of this year, the freight market continues to remain stable and in shippers’ favor. Consumer spending has recovered from a winter slowdown, and the manufacturing sector has expanded for the first time in 16 months—factors that illuminate a resilient economy. 

However, a market turn is still possible later this year, as spot-to-contract rate spread normalizes and carriers rightsize their headcount. Now is the time to build proactive, data-driven logistics strategies to ensure your team is prepared to address future disruption. Our latest Quarterly Market Update and Outlook Report shares data and insights from our experts around the impacts of leading economic and supply chain trends. In Q2, these include the state of rates and route guide performance in the U.S. truckload sector, capacity constraints in Mexico, and new sustainability policies designed to reduce our industry’s carbon emissions. Read on for a snapshot of what to expect and how to prepare: 

U.S. trucking: While cost and capacity pressures ease, the market could tighten in H2

The truckload market is continuing its journey to supply-demand balance. After the U.S. manufacturing sector grew for the first time in 16 months—with the ISM Manufacturing PMI index rising to 50.3 in March—the demand for truckload recovered following a slowdown in early 2024. 

On the supply side, for-hire trucking carriers added 4,100 jobs in March, the highest increase since June 2022 (excluding the hiring of Yellow’s laid off workers last September). 

The state of spot and contract rates should be of particular interest to shippers, especially as they seek to plan and manage their budgets for the second half of the year. Spot and contract rates fell in February, March, and April; and contract rates, specifically, remained flat and were 14% lower year-over-year. Historically, when contract rates fall, carriers reduce headcount, and eventually shippers could face rising spot rates and lower First Tender Acceptance (FTA) rates. 

Our recommendations:

• To maintain high FTA, build strong, productive relationships at the lane level, as carriers are more likely to accept a tender the longer a rate has been in place, and benchmark your network to pinpoint underpriced or overpriced lanes. 
• Improve visibility by developing a plan to integrate carriers into your preferred method of communication and tracking. For example, Uber Freight’s scheduling API empowers seamless integration between logistics technology platforms and carrier scheduling systems.
  

The latest in Mexico: Carriers seek long-term commitments as capacity tightens

After surpassing China as the lead trading partner for the U.S. last year, Mexico remains a cornerstone of economic progress. The total trade value between both countries reached $745.6 billion in 2023, and 81% of Mexico’s exports were shipped to the U.S. 

There is massive potential for growth and success of cross-border transportation programs this year, but logistics teams must have plans in place to navigate future volatility. Mexico carriers are beginning to experience capacity constraints as shippers increase volumes, and the country is also experiencing a driver shortage, with 56,000 unfilled driver positions—a 9% year-over-year increase. 

Cargo theft also continues to escalate. During January and February, the country reported 1,381 theft incidents. Members of the Mexican Alliance of Carrier Organizations (AMOTAC) responded by holding a national strike on the central federal highways.

Additionally, Mexico continues to capitalize on the benefits of nearshoring. Last quarter,  the Secretary of Economy identified 73  investment announcements, representing $31.5 billion and 39,000 new direct employment over the next two to four years.

Our recommendations:

• As more manufacturing facilities are installed in Mexico due to nearshoring’s growth, capacity will tighten. Prioritize forming long-term commitments with carriers to ensure capacity during high demand periods. 
• To address driver shortages, develop processes to improve their working conditions. Tools like facility ratings technology can help uncover driver frustrations and improvement opportunities. 
• Prioritize fighting cargo theft with fraud prevention solutions including real-time shipment tracking to catch suspicious activity.
  

Sustainable logistics: New policies spark consideration for green solutions

The transportation industry is responsible for as much as 11% of worldwide carbon emissions, emphasizing the need for logistics teams to build greener supply chains. Making sustainable choices not only helps fight climate change, but it can also save your business money and enable your transportation operations to stay ahead of changing sustainability regulations. 

The Biden-Harris Administration in March released the National Zero-Emission Freight Corridor Strategy, which will guide the deployment of zero-emission medium- and heavy-duty electric vehicle (HDEV) charging, along with hydrogen fueling infrastructure from 2024 to 2040. Phase 1 of this strategy will establish priority hubs for HDEV charging and hydrogen refueling along U.S. freight corridors over the next three years, based on freight volume. 

Additionally, the Securities and Exchange Commission (SEC) has introduced new requirements for carbon footprint disclosure. Beginning in 2025, public companies must report Scope 1 and Scope 2 GHG emissions, how they’re addressing climate-related risks, and their climate targets and goals.​

Our recommendations:

• Connect with your logistics partner to figure out if and when electrification makes sense for your business, and how to adopt and deploy HDEVs in the future. 
• Gain better visibility into emissions estimates with tracking technology such as the Uber Freight Emissions Dashboard to help identify your biggest carbon contributors.

These are just a few of the findings from our new report. For a comprehensive outlook of what logistics teams can expect this quarter, including an overview of global supply chain events, see our full Q2 Market Update and Outlook Report.

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April 2024 freight market update: Key insights

Updated April 24, 2024

Both inflation and the labor market seem to be more resilient to the tightest monetary policy seen in decades. Consumer prices in the US have surprised to the upside for three months in a row. The unemployment rate fell to 3.8% in March as the economy added 300K payroll jobs, the highest increase since January 2023 (tied with May 2023). The recent rise in inflation and employment indicate that the Fed is likely to keep the Federal Funds Rate higher for longer. Despite that, freight demand is back to growth mode. Retail sales rebounded in March and manufacturing output expanded for the first time in 16 months. However, the freight market unexpectedly added more capacity in March. For-hire trucking carriers added 5.1K jobs, the highest increase since June 2022, except for September 2023, when carriers rushed to hire YRC’s laid off workers. In addition, the number of new trucking carriers authorized by FMCSA exceeded authority revocations for the first time since March of last year, and the second month only since October 2022.

Impacts and recommendations from the Baltimore’s Key Bridge crash – The Port of Baltimore handled more than $80 billion in international cargo in 2023. It’s the top port for the nation’s farm and construction equipment, and the closest East Coast port to the Midwest. – Prior to the accident, nearly 4,900 trucks passed over the Francis Scott Key bridge per day. – Overall, there will be minimal impacts to container traffic. The majority of volume is being diverted to the port of New York/New Jersey or the port of Virginia. So far, this has generally not caused any major congestion or increase in pricing other than diversion fees charged by carriers for specific Baltimore-designated origins or destinations. Salvage crews have started unloading containers from the Dali, and Unified Command announced they will re-open the main channel by the end of May. – Uber Freight will continue to provide additional visibility in the region, and until the confirmation of the channel opening will continue to reroute shipments to alternate, nearby ports.

Read the detailed report here.

*All data is generated by Uber Freight internal indices using a weighted combination of truck and driver availability for supply, and manufacturing output, goods consumption, imports and exports for demand.

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Key Findings from the 2023 International Roadcheck

During the 72-hour International Roadcheck in 2023, a total of 59,429 commercial motor vehicles underwent inspection across Canada, Mexico, and the United States. Notably, 81% of these vehicles and 94.5% of drivers inspected continued their journeys without any out-of-service violations, underscoring the commitment to safety within the industry. The most common out-of-service violations were brake systems, tires, and defective service brakes. This underscores the importance of maintaining vehicle health in optimal conditions to ensure compliance and safety on the roads.

Understanding DOT Week

The CVSA International Roadcheck is a yearly event where enforcement officials conduct rigorous inspections on commercial motor vehicles across North America. From ELD compliance to tire treads, every aspect of trucks and drivers is under scrutiny during this 72-hour period. Suffice it to say that it’s important to do but not an enjoyable three days for drivers.

Impact on Capacity and Operations

DOT Week invariably affects truckload capacity, with some drivers opting to park their trucks to avoid potential inspections. This can lead to a temporary dip in available capacity, impacting routing guide compliance and potentially inflating spot market rates.

Key Considerations for this year’s Blitz

Here are six things to anticipate during DOT Week:

• Tighter capacity as some drivers choose to stay off the road temporarily
• Potential disruptions to routing guide compliance, particularly in mid-range hauls
• Increased spot market rates due to decreased carrier supply
• Possible delays for shipments as drivers undergo thorough inspections
• Nationwide impact, affecting carriers and shippers across the continent
• A gradual return to normalcy post-DOT Week, with lingering effects on capacity and freight movement

Preparing for DOT Week

For shippers:

• Accommodate potential delays by working with flexible transit schedules
• Ensure DOT compliance for your transits, avoiding unrealistic schedules
• Communicate layover accessorials clearly to drivers to maintain efficient operations
• Stay flexible and consider postponing shipments to avoid peak disruption
• Remain calm, knowing that despite tighter capacity, operations will continue

For carriers:

• Plan for potential delays and budget extra time for inspections
• Encourage drivers to maintain a polite and cooperative attitude during inspections
• Seize the opportunity for available freight during DOT Week to showcase reliability
• Adopt a proactive approach to compliance, treating every week as if it were DOT Week
• If you encounter any delays due to DOT Week and you are on an Uber Freight load, reach out to our 24/7 Support Team (844) 822-8237, or use our in-app support flow by clicking on the headset icon

DOT Week presents challenges and opportunities for shippers and carriers alike. By staying informed, proactive, and adaptable, businesses in the Uber Freight network can navigate this annual event with confidence and resilience.

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However, while shippers have enjoyed low spot rates and abundant capacity for the past two years, it’s never too early to prepare for a market turn. First tender acceptance (FTA)—the frequency with which first-awarded carriers accept shipment tenders—should be a KPI of focus. In a market turn, unprepared shippers could face an abrupt decrease in FTA rates, resulting in higher procurement expenses and a degradation in service.

To help logistics teams better prepare for a potentially tighter market this year, our research team at Uber Freight reviewed industry data and our historical network data to conduct predictive and prescriptive research about how the state of the market impacts FTA. Our findings provide insight into how a market shift could impact shippers’ networks, and actionable steps for teams to improve their FTA rates and maintain high-quality service.

Will the market actually turn in 2024?

Economic forecasts initially communicated that the freight market would turn in the last half of 2023. However, as of May 2024, we’re still seeing spot rates bottoming out and routing guide compliance at an all-time high. 

In hindsight, it’s clear that those forecasts underestimated the impact of high profits that trucking firms accumulated during the pandemic. Carrier revenue momentum from the tight market carried over to the past two years, with profits hitting record highs: long-distance trucking firms earned their highest revenue ever in 2022 at $252 million.

Our research tells us a market turn in 2024 is very possible, with the telltale sign being a recent, significant drop in carrier revenue and contract rates. In Q3 of 2023, contract rates dropped 18% year over year. Historically, when contract rates fall, carriers reduce their headcount—and shippers could face skyrocketing spot rates and lower FTAs.

These factors impact FTAs

To maintain a high level of service, shippers must make proactive changes to routing guides and carrier partnerships. We used half a million loads that took place on the Uber Freight network to develop quantitative FTA forecasts under different scenarios, considering a few key variables that are readily available to shippers.

First and foremost, a tight market will cause FTA rates to plummet. When spot rates are high, carriers are more likely to reject tendered loads because they have leverage to weigh the most financially beneficial opportunities when there’s limited capacity. When the market was tight in January 2022, FTA rates averaged 60-70%. The rates gradually increased to more than 90% as the market softened over the next two years.

Rate-to-market, the tendered rate divided by the spot rate on a given lane during the same month, is a key predictor that influences FTA rates: tender acceptance usually increases when the rate-to-market is higher. The rate duration and tender frequency on a given lane also impact FTA, as carriers are more likely to accept tenders from contracts that have been in place for longer and include a higher number of loads.

Scenario planning helps forecast FTA rate changes

The smartest way to prepare for a market turn is to consider how certain realistic scenarios will impact FTA rates. Our team used predictive modeling to forecast three potential outcomes:

1. A scenario where spot rates remain the same for the next 12 months

2. A baseline, probable scenario where spot rates rise by 4% year-over-year over the course of 2024, with larger increases in Q3 and Q4.
3. An inflationary (albeit unlikely) scenario where spot rates rise by 12% year-over-year 

In the flat scenario, the FTA rate consistently remains at 90%. In the base scenario, the FTA drops to 87%. Finally, in the inflationary scenario, the FTA rate plummets to 79%.

Companies that aren’t ready for the baseline and inflationary scenarios could experience a deterioration in service and higher expenses, especially if they have to resort to the spot market to transport their freight. In these scenarios, medium and long hauls will likely be more impacted than short hauls, as their tender acceptance rates will fall at a more drastic pace.

In an inflationary scenario, service levels could fall drastically across all lanes with aggressively priced lanes (those whose rate to market is less than 100% as shown above) being impacted the most (with a 16% decrease in FTA). 

Rates that have been in place for more than six months will experience less of an FTA drop than rate durations of less than six months. 

Strategies to keep FTA high—no matter the market conditions

While the market is soft, it’s vital for shippers to analyze their supply chain vulnerabilities and pinpoint the most beneficial changes to their transportation budgets, routing guide structure, and carrier relationships:

• Price lanes accordingly. Compare your contracted rates to spot rates, and use that information to offer more attractive pricing for lanes at risk of tender rejection. Focus on long hauls, as there will be fewer carriers willing to spend days moving a load at the expense of more profitable opportunities. 
• Budget for involuntary spot volume. If tender rejections increase and routing guide compliance decreases, spot rates will increase—and so will the likelihood of shippers having to resort to the spot market to move their goods. 
• Build productive carrier relationships at the lane level. Carriers are more likely to accept a tender if the rate has been in place for more than six months. Consistently vet carriers and communicate service feedback when necessary. 

Whether the market turns or remains the same in the coming months, start preparing for any scenario today with actionable insights from our tender acceptance whitepaper.

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