Dedicated fleets have always been a potential source of truckload capacity for shippers but have become even more valuable during the current tight market. After years of unprecedented premium spot market rates and low primary tender acceptance, shippers are evaluating where they can implement new dedicated fleets while maximizing the benefit of existing ones.

Dedicated fleets are often considered for their cost saving opportunities and the ability to guarantee service for high-density customers.

Maximize fleet value with lane fit and fleet sizing

While the goal of a local fleet is to run short hauls and return home, longer lanes should have a backhaul load to offset the cost of round-trip miles paid to the carrier. Investing in a dedicated fleet can be a long-term solution that provides endless value to your transportation management. To implement a dedicated fleet, a shipper must have freight density and consistent flow of volume in a targeted shipment area. Fleet management should target no more than 10-20% empty miles to meet industry standards for a regional fleet. Dedicated fleets can be evaluated for high-mileage lanes but should only be implemented if backhauls are heavy, consistent, and scheduled favorably for drivers while meeting utilization goals.

To help maximize fleet value and expand the potential fleet lane fits, shippers can partner with external networks to find more backhauls. Highly efficient shippers implement programs that provide backhaul solutions including planned continuous moves and dynamic continuous moves. Uber Freight’s Lanehub provides planned continuous moves by matching our dedicated fleet lane network to live RFPs that may have a useful backhaul out for bid. This allows shippers to effortlessly secure backhaul freight to reduce empty miles and optimize fleet utilization. Uber Freight’s Dynamic Continuous Moves is powered by AI and enables dedicated fleets to find backhauls without a permanent commitment to a given lane—allowing the fleet to fill empty miles on an ad-hoc basis. It’s important to maintain balance between prioritizing backhauls and picking up the driver’s next load—both need to be considered and optimized daily.

Shippers can also ensure less volatility in the load tendering process by taking advantage of Uber Freight’s committed capacity feature offered to carriers. This feature opens opportunities for carriers of all sizes, allowing them to lock-in loads across 1,000-plus dedicated lanes and plan their operations up to three months in advance. In tandem, shippers can also turn to Uber Freight’s direct API integrations to bring real-time pricing and instant capacity within their transportation management systems, leading to reduced overhead costs, increased revenue and flexible, scalable operations.

Other active fleet management success factors

Long-term success requires on-going monitoring of the fleet’s health to provide direction for continuous improvement, including considering the following:

• Engineered KPIs: Set and measure KPIs appropriate for each fleet type and fleet. Are turns or average miles per week the critical KPI? Percent backhauls by fleet? Do seated trucks count? Modify targets two to four times per year for realistic, but challenging targets.
• Develop a dashboard for each fleet that reports utilization by truck, truck count, empty mile %, heavy haul %, and cost allows for a full picture of fleet performance. Every fleet in the network should be represented in one centralized view.
• Cost-out Initiatives: Be creative when thinking about what cost-out initiatives to implement. Consider using drop trailer space at the shipper and receiver locations for more efficient loading and unloading. Is a third shift available for the driver to begin slip seating? Other popular cost-out initiatives include: equipment utilization (average weight/cube per load), dwell time, domiciled trucks, scheduling optimization, backhauls and collaboration.
• Fleet Administrative: Manage fleet contracts as living documents and update as necessary. Audit invoices to contracted rates to ensure costs are accurate.
• Fleet Lane Fit Analysis: Regular continuous improvement calls and monitoring KPIs are necessary to get the most out of your dedicated fleet capacity and to determine which lanes are the best fit. Review quarterly or semi-annually with a detailed analysis.
• Preferred Mode: Dedicated fleets should be viewed as a preferred mode. Fleet trucks should be prioritized in routing guide placement, appointment setting and provided drop space to maximize efficiency.

To learn more about Uber Freight’s dedicated fleet support, dedicated fleet assessment, and dedicated fleet engineered KPI dashboard services connect with an Uber Freight Consulting leader.

Learn more about dedicated freight.

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By: Carlos Godinez, VP Business Development, Mexico

This year marks another difficult year across the global supply chain with tight capacity, increasing inflation and lack of reliability continuing to trouble the industry. Carriers are facing high volatility, uncertainty and demand, while shippers need increased confidence so they can find capacity efficiently and at a fair price. These issues are only expected to worsen in 2022, according to a recent S&P Global market insights report.

When it comes to cross-border collaborations, there is no shortage of challenges. The supply chain flow across the US and Mexico border operates as a black hole — low load visibility and shipment control on both sides of the border are frequent, making it even harder to ensure goods will clear quickly and seamlessly. Complexities in evolving international trade are rising, making it difficult to stay up to date on the legal, regulatory, and industry changes. Additionally, long customs clearing times, multiple customer processes for different ports and a lack of capacity hinders operations.

With inefficiencies and high costs impacting the US and Mexico cross-border supply chain, it’s important now more than ever to have visibility and control over freight operations. Digital transformation must be at the root of all business solutions to keep the cross-border supply chain moving.

Current State

As one of the top trading partners for the US, Mexico accounted for 14.4 percent of the total trade of goods for the US as of December 2021, totaling about $661 billion in trade, according to data from the US Census Bureau. This number will continue to grow in the future, as it has over the last 20 years since the NAFTA agreement was put in place, with companies in both the US and Mexico looking to expand cross-border operations. Just last year, companies such as Phillips Industries, Grupo Industrial Saltillo, Stanley Black & Decker Inc. and Whirlpool Corp. announced expansions into Mexico, which totals more than $200 million in investment and about 3,000 new jobs.

Despite the recent boom in economic activity, there’s a perfect storm of challenges brewing across the US and Mexico supply chain. Peak seasons are running longer and trucking companies in both countries are struggling to find drivers, with many drivers retiring or leaving Mexico to work for a US-based carrier by taking advantage of the B1 visa scheme. Because the volume and velocity of shipments has increased for companies in both countries, it’s also becoming more feasible to bring freight from Europe or Asia directly into Mexico through ocean ports, which decreases the amount of southbound flow from the US and capacity coming directly into the Mexican marketplace.

Digital Transformation’s Role

Uncertainties have become common in the cross-border supply chain. Being aware of security challenges, the current economic environment and regulatory issues are crucial to keep supply chains moving seamlessly across the border. To manage and address the complexities of the cross-border supply chain, digital transformation is essential to promote real-time end-to-end visibility from freight origin, to customs clearance and final delivery.

The first place to start is ensuring businesses have the proper technology systems to keep supply chains moving. Traditional transportation management systems have a long history of being out of date, often hindering a business’ ability to respond to delays or impacts to time-sensitive shipments. The next generation of transportation management systems allows shippers to control all aspects of their supply chains by harnessing data from multiple sources and applying them to deliver real, sustainable outcomes to logistics and supply chain operations. Active shipments, on-time arrivals and delays, and carrier performance are among the key performance indicators tracked with an up-to-date transportation management system.

Additionally, organizations must implement a “control tower” type of approach to transportation management. With a mix of shipment data, weather and traffic alerts, customs updates and compliance regulations, shippers can have a singular, all-encompassing, real-time view of their supply chain. Plus, being a cloud-based solution, the modern-day transportation management system can provide organizations with a data center application at a significantly lower cost of ownership.

Integrated solutions across ground, intermodal and ocean transportation, warehousing and distribution, US and Mexico customs compliance and transloading can make cross-border shipping easier than ever. Businesses can utilize customs brokerage and trade compliance expertise to create a single, controlled logistics solution with access to all US and Mexico points of entry to simplify global trade operations. In addition, remaining versatile in the ever-changing regulatory environment of cross-border transportation can allow for flexible, strategic processes to help mitigate risk, reduce supply-chain costs and gain visibility for logistics operations.

The cross-border supply chain never sleeps — at all hours of the day and night, shipments are moving, data is being generated for supply chain insights, security measures and regulatory requirements are being navigated and unexpected events that impact operations can arise. Digital transformation must be at the forefront of all logistics operations to guarantee visibility, flexibility and control of supply chains into the future

The post How Digital Transformation Will Shape the Future: A US-Mexico Cross-Border Perspective appeared first on Uber Freight.

The historic levels of LTL over capacity compelled FedEx Freight to temporarily suspend service to a portion of its customer base this summer. As the largest LTL carrier in the U.S., FedEx attempted to recover service quality by removing shipments with more costly freight in high-density shipping zones. FedEx spokesman Jim Masilak said FedEx Freight implemented targeted volume controls designed to minimize network disruptions and balance capacity and demand to avoid backlogs across the country.¹ Many other carriers have implemented temporary embargoes for specific terminals based on spikes in demand and are limiting their exposure to extreme length pieces of freight (a handling unit that is over 8’ in length).

LTL Imbalance and Backlogs

For most carriers, creating LTL capacity is a complex, time-consuming process requiring an integrated network of terminals, available trucks and drivers, and extensive investment and planning.

These networks are being disrupted with an LTL freight imbalance caused by several factors:

• The industrial manufacturing sector—which relies heavily on LTL freight—is experiencing tremendous growth.
• A substantial driver shortage due to COVID-19 and a new federal Drug & Alcohol Clearinghouse that removed 70,000 commercial truck drivers.
• Continued supply chain disruptions forcing reallocations across transportation modes, including massive backlogs at California ports, an over-saturated truckload (TL) market, and shifts in parcel, rail, ocean and air.

Reducing the Impact of Delayed Service

Shippers should be prepared for this market to remain tight through the beginning of next year, if not longer. To maintain LTL capacity and minimize schedule disruptions, shippers can follow these tips:

1. Send accurate pickup information in advance, at least one day before pickup.
2. Engage locally with your primary LTL carriers and drivers to ensure consistent capacity.
3. Increase the utilization of electronic pre-assigned pro numbers.
4. Improve driver and equipment (trailer) utilization when loading / unloading.
5. For critical shipments, ship 1 – 2 days early or ship with guaranteed service to ensure timely delivery.
6. Review lanes that are consistently late and make targeted adjustments to your lead time.
7. Enhance pallet loading by improving stacking ability, reducing overhang, increasing density and reducing pieces over 8 feet in length in order to improve handling. This will enable a more efficient flow for loading, unloading and cross-dock operations, as well as reduce the number of lost and damaged goods.

Preferred Shipper Best Practices

By following this guidance, one shipper with two high-volume LTL locations in the Midwest experienced considerable LTL capacity improvements.

At two Midwest locations, carriers have a maximum number of dropped trailers they can accommodate daily. To maintain schedules, the shipper adjusted the ship date by day of the week and region for the majority of its network. As a result, the shipper saw improved load optimization while reducing freight costs, maintaining or decreasing transit times and raising overall on-time performance.

The load optimization allowed:

• Additional multi-stop TLs for large mark LTL shipments. This resulted in reducing shipments tendered to traditional LTL carriers over 10,000 lbs., which are undesirable in these market conditions
• Pool consolidations going to the Northeast, Southeast, South, and West Coast
• Additional cross-shipper collaborations through Uber Freight OptiPro and LTL collaborative pooling

The shipper was also able to reduce reliance on traditional LTL carriers, which avoided missed or late pickups due to the reduced volume.

With ongoing LTL freight over capacity, supply chain professionals should collaborate with logistics technology and solutions partners to minimize schedule disruptions and manage transportation costs.

To learn more about LTL capacity solutions, connect with our LTL team at ltl-sales@uber.com and sign up today for an instant quote.

To get the list of “Preferred Shipper Best Practices,” and learn more about Uber Freight’s multi-shipper collaboration solutions and managed transportation services, connect with a expert.

*The above article first published in Talking Logistics.

1. “FedEx Freight prunes 1,400 customers to protect service level,” Eric Kulisch, FreightWaves, 6/13/21
https://www.freightwaves.com/news/fedex-freight-prunes-1400-customers-to-protect-service-levels

The post Seven Tips to Handling the LTL Freight Demand appeared first on Uber Freight.

Years of fundraising, investments, and improving the product led to opportunities to showcase Lanehub’s cloud-based collaborative solution to the logistics community, such as their demonstration at FreightWaves’ Transparency18 event in 2018.

In early 2020, Transplace acquired Lanehub, a cloud-based platform and community that encourages shipper-carrier collaboration by automatically identifying and connecting companies with complementary freight lanes to help shippers save on shipping expenses. The transportation community provides its members with opportunities to collaboratively source reliable, contracted capacity on recurring, consistent lanes at a sustainable lower cost from carriers and private/dedicated fleets by matching headhauls and backhauls.

Lanehub Integration with Transplace TMS

The Lanehub acquisition bolstered Transplace’s Network Services for its customers by providing the technology to deploy Planned Continuous Moves. Transplace’s transportation network is used to identify and execute continuous move shipments, increasing truck utilization and reducing transportation costs. The integration with Lanehub added automation and enhancements to the solution and the Lanehub collaborative network expanded opportunities for the combined shipper community. Customers within the combined networks have the ability to lock in competitive rates, reduce inefficiency, and maintain carrier capacity.

Solving Capacity Issues through Collaboration

Under-utilized capacity and empty miles result in added costs and inefficiencies for shippers and carriers. With the ubiquitous adoption of technology across the industry, Lanehub  identifies synergies faster and easier so collaborative efforts are ongoing.

Carriers need relationships with shippers along freight lanes or those using the same lanes to reduce empty miles. Shippers, on the other hand, are subject to changing freight rates of carriers, sending out annual RFPs in search of better deals, and losing out on potential cost savings by building relationships with carriers.

Lanehub solved these challenges by creating a Planned Continuous Moves matching system for carriers and shippers. Through Lanehub’s technology, complementary recurring shipping lanes are identified and those in its transportation network are matched and invited to connect with each other.  Shippers can connect with carriers or other shippers to maximize truckload capacity, build synergistic, long-term partnerships, and reduce costs.

Lanehub’s collaboration network includes over 150 shippers, 250 carriers, and 180,000 freight lanes.

Learn More about Freight Lane Matching and Collaboration with Mark Hackl

Taking Collaboration to the Next Level

The strategic acquisition of Lanehub has made collaboration simple, transparent, and efficient for Transplace’s more than $9 billion of freight-under-management. To date, Lanehub’s technology has provided 26 million matches within its customer network. With Transplace’s Transportation Management System (TMS) and advanced logistics technology platform combined with Lanehub’s technology, millions more Planned Continuous Moves through freight lane pairings are possible, reducing miles of waste in logistics and supply chains.

Transplace also created a team to assist Lanehub shippers with executing identified and agreed upon Planned Continuous Move opportunities. The team is working as an intermediary for management, tendering, and freight payment activities between shippers, particularly with identified opportunities for private and dedicated fleets.

The integration provides Lanehub with Transplace’s broad range of logistics services and technology, global trade management, and strategic capacity solutions. Transplace optimizes capabilities for Lanehub’s customers, including greater efficiencies, more cost savings, and outstanding customer service.

With the acquisition and integration, both company’s customers gained access to the most advanced transportation technologies, increasing competitive advantage in the marketplace. Customers also have more opportunities to connect and convert traditional one-way moves into more collaborative round trips, improving fleet revenue while significantly reducing empty miles and poor asset utilization.

How can Lanehub and Transplace save you money? Contact your Transplace account team to learn more!

The post Increasing Shipper-Carrier Collaboration with Transplace’s Planned Continuous Moves Lanehub Platform appeared first on Uber Freight.

By Darren Miesner, Vice President of Operations, Transplace

It’s a fascinating time in the logistics industry. Increased demand and customer expectations are putting intense pressure on shippers to deliver on-time-and-in-full without blowing their bottom line. And while capacity has loosened in the first half of 2019, the spot market is still well above the levels seen in 2015, 2016 and even early 2017. In this current environment, a capacity crunch can truly rewrite the rules of the game—making it critical to be prepared in advance.

I recently had the opportunity to discuss how to prepare your supply chain for capacity challenges with Adrian Gonzalez on an episode of Talking Logistics. Below are some of the key insights shared during our conversation about how shippers can plan for ongoing capacity challenges and optimize that plan through analytics, feedback and consistent updates.

Build Out (And Constantly Update) Your Playbook

At Transplace, Lean Six Sigma’s PDCA (Plan, Do, Check, Act) model is ingrained within our DNA—and shippers can use this same method to keep ahead of obstacles in their own supply chain operations. The key is to forecast and simplify your operations as much as possible to create a plan, and then as that plan is enacted, look for successful, repeatable elements that you can build out to adjust. So, when the next hurricane or polar vortex throws your supply chain out of balance, you can continuously improve in how you adapt and respond.

In particular, forecasting is absolutely instrumental in setting shippers up for success. You need to spend the necessary time to create a playbook for what will happen within your network during any disruption or seasonal event. Make sure you understand the unique seasonality, surges and holiday schedule of your organization and supply chain. Re-evaluate these as often as possible and update your plan accordingly—this is where the right data and predictive analytics can be absolutely invaluable.

Why Your Plan Matters to Carriers

When it comes to planning with your carriers, if you come to the table with your playbook and help them to better understand your business, they too will become invested in your operations. This allows both parties to plan appropriately and flex when the capacity market fluctuates.

In the retail market in particular, it’s also important to focus on smoothing volume. For example, you don’t want 80% of your 300-mile runs picking up on Friday and delivering on Monday—that’s certainly not carrier-friendly. Make sure you consider network optimization from all sides of your operations, including that of your carrier partners.

Developing Your Bid Strategy: Bid Early, Bid Often

At Transplace, we bid annually—and these annual resets give us the best results possible because so much can change over the course of the year. While there are many different strategies to choose from, our approach is to stay hand-in-hand with carriers and bid strategically annually based on the current market landscape.

Shippers (or their 3PL partners) may have a core carrier base that may be managing up to 60-80% of their freight. It’s critical to protect these carriers and have conversations with them first as part of a mutual partnership. This is a great way to gain continued support from your incumbents and keep your bids as close to your cost-out goals as possible.

Data, Metrics and Communication

In order to reach true network optimization, shippers need to utilize the right analytics and business intelligence, and there are a few key metrics that help paint an overall picture. For example, are your carriers accepting and picking up loads (primary tender acceptance/routing guide compliance) that they bid and committed to? Forecast accuracy is also a big aspect of post-bid compliance. Are your carriers shipping what they said they were going to ship, or are they shipping more/less?

It’s also important to consider the cadence of providing feedback. Ensure that you’re regularly communicating with carriers about the outputs of your score carding—this helps to instill confidence that you know what’s going on with your market. And partnering with the right 3PL provider who has deep expertise in your core markets can also help give you the industry edge you need to succeed.

Want to learn more? Watch the full video of my conversation with Adrian Gonzalez below!

https://www.youtube-nocookie.com/embed/YI0v039rAqM&feature=youtu.be

How are you planning for the next capacity crunch?

The post Preparing Your Supply Chain for Capacity Challenges appeared first on Uber Freight.

Within the last few years, less-than-truckload (LTL) rates and capacity have fluctuated. Many carriers have shifted from the traditional National Motor Freight Classification (NMFC) rate-setting formula to density-based pricing, which prices freight according to the amount of space the shipment uses in the truck. This new pricing model, along with other recent industry trends, has had a significant impact on shippers – making it important to understand the new pricing methods for LTL shipments, what’s currently happening in the LTL industry, and some of its key market challenges.

Current LTL Pricing Methods

According to The National Freight Traffic Association, the NMFC is a “standard that provides a comparison of commodities moving in interstate, intrastate and foreign commerce, similar in concept to the groupings or grading systems that serve many other industries.” Using this model, commodities are grouped into 18 freight classes—from a low of class 50 to a high of class 500—based on an evaluation of these characteristics:

• Density
• Handling
• Stowability
• Liability

More recently, the LTL industry has incorporated density-based pricing, which considers the actual weight of a particular item, classifies it and determines how much volume it will take up in a trailer. The first step many carriers have taken is introducing “Dimensioners” into their network to efficiently capture the density of each shipment as it travels through their network. This helps the carrier better understand the actual cost incurred for each shipment in order to more accurately price each account.  This method is comparable to how large parcel shipping companies such as UPS and FedEx determine their costs to ship products.

Challenges within the LTL Market

So, what does this mean for shippers? With more and more carriers adopting density-based pricing, new challenges have appeared for shippers who have lightweight shipments or bulky items that take up a lot of trailer space. And with the new pricing model, LTL carriers are requiring shippers to pay additional fees and are increasing the pressure to accurately measure shipments.

Some other challenges currently being faced by shippers in the LTL market include:

• The LTL industry is trending overall toward more frequent, smaller volume shipments. This is exacerbated by the “Amazon Effect”, as there is a greater number of smaller volume packages—instead of fewer bulkier packages—that are expected to be shipped within one or two days.
• Capacity has tightened significantly since May of 2017 across all equipment types. And with more frequent deliveries with more volume, many LTL carriers are having trouble covering all of these shipments.
• Recent natural disasters have made these LTL market challenges all the more difficult for shippers to overcome. Hurricanes Harvey and Irma as well as earthquakes in Mexico have caused additional delays in shipments and pulled further capacity out of the network.

One industry that is seeing the brunt of many of these LTL shipping challenges is the chemical space. During the winter months (November to May)—especially in the Midwest—many customers ship water-based products that freeze at 32 degrees. And as it currently stands, the LTL reefer market is very saturated, and with capacity already more limited, these chemical shipments have had trouble being filled.

LTL Shipping Solutions

One potential solution for LTL shipments is to co-load with other shippers, as consolidating in a multi-shipment environment can truly bring a number of benefits in this particular market. Uber Freight’s OptiPro program provides an optimization opportunity for shippers with under-utilized capacity through a multi-faceted collaboration network. Through this collaborative approach, multiple customers who are shipping products to the same region can build dynamic multi-stop truckloads. And a great shipper match results in:

• Transportation cost savings
• Reduced working capital
• Inventory improvement
• Greater order fill rates
• More frequent deliveries
• Increased flexibility to support customers

Collaboration has long been a focus in the transportation industry, but its realization has been a challenge because of the manual processes and lack of scalability. Uber Freight continues to strive toward creating an environment in which we are looking load by load across our whole customer network to see exactly where and how we can save our customers time, capacity time and money.

To learn more about Uber Freight’s OptiPro program with Managed Transportation, connect with an expert.  To learn more about Uber Freight’s Shipper Platform LTL freight shipping services capabilities, connect with a LTL sale team at ltl-sales@uber.com or sign up today for an instant LTL quote.

Check out Uber Freight’s density calculator to calculate freight density, estimate NMFC freight class, and optimize LTL shipping costs.

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