LTL Freight News

Electronic Data Interchange (EDI) has been the industry standard for years. EDI is a form of communication between two systems where the specific status or value of something is conveyed to another system at a particular time, and ongoing communication between the two systems endures based on scheduled batch exchanges or data transmissions that take place at regularly scheduled time intervals. For example, a shipper may send a carrier a list (or batch) of shipments they would like the carrier to pick up every morning. In turn, the carrier will transmit an EDI file back to the shipper at the end of the day that acknowledges receipt of the request sent by the shipper asking for pickup of those shipments, so the shipper knows the carrier received their request. Shippers and carriers can communicate using this process daily, but the exchange of information is essentially only an exchange of status messages that acknowledges communication being sent and/or received. It doesn’t give any f...

A part of the spending bill recently approved by Congress and signed into law by the  President  will give truck drivers relief from two hours of service rules that are widely accepted as being a hindrance to truck driver productivity. Relief from the mandatory 34 hour restart, and more specifically the relief from the 1AM to 5AM rest period, and the 168 hour rule are now temporarily suspended. The funding bill did not suspend the mandatory 30 minute break period, however. This change will allow the hours of service rules to revert back to what was in place prior to the change on July 1, 2013.   Another part of the funding bill is a requirement that the Federal Motor Carrier Safety Administration (FMCSA) studies the impact that the rule changes have on safety, drivers and carriers. The FMCSA is required to study two groups of drivers - one group prior to the rules changes implemented on July 1, 2013, and one group studied after the changes were implemented - and a...

If you've been using the same courier or transportation company for some time, maybe you have grown comfortable with the status quo, and the communication is stagnant. There may be some efficiencies that can be leveraged to help stabilize, and even lower costs for you and your carrier(s). Having your shipping team come in a little earlier or later than normal may allow the carrier to come in for an earlier or later pickup or delivery. This could reduce damages if your freight is now picked up at the end of the day rather than in the morning, or on the flip side it could enable you to receive orders first thing in the morning instead of at the end of the day. Small adjustments to help accommodate the carriers’ needs, like having the shipping team come in an hour or two earlier or later, can create efficiencies that produce immeasurable soft dollar savings for the shipper and the carrier. Savings can take the form of reduced damages and faster turnaround times on new orders. The wi...

According to the American Association of Railroads, the intermodal volume increased 5.9% year-to-date for all of North America to 10.3 million trailers and containers through the week of August 9th. T he Georgia Ports Authority reported that the container volume at the Port of Savannah reached a record level in July. "Container trade increased to 293,889 20-foot equivalent units at the port, surpassing the record set in May by almost 3,500 units."  The Georgia Ports Authority stated that this was a 19.2% increase year-over-year.  The GPA Executive Director said in a statement: “Improved confidence among U.S. retailers, newly added port customers and shifting cargo from U.S. West to East Coast are all fueling the growing cargo volumes at Georgia’s deep water ports.” Per the  Intermodal Association of North America in a report last week, the  Southeast came in with a 12.9% growth rate, but with just a little over 200,000 shipments it had the lowest total of overall...

FAK stands for Freight All Kinds. If a shipper has an FAK it means that they have an agreement with their carrier or service provider (3PL) that allows different items falling into multiple different freight classes to be billed and shipped at the same class. An FAK may be beneficial for shippers with several commodities shipping at multiple classes, but it doesn't always make sense. A shipper’s volume, product mix and product types (value) are all things that should be taken into account before an FAK is considered. Let’s say a shipper has several commodities ranging from class 50 to a class 77.5. This shipper may want to consider asking for an FAK 50, which if implemented would allow all of their shipments ranging from class 50 up to a class 77.5 to be rated and billed at class 50. This would provide savings for some of their shipments. More specifically it would save them money on the shipments that had historically shipped above a class 50 and below or equal to class 77.5. And ...

There are differing opinions and reports from professionals in the supply chain industry about the use of the gain share model by brokers or 3PL’s. Some shippers are happy with the model and some aren't. There’s no denying that it works in some instances, but many logistics experts are reporting that there is a lack of visibility and control associated with it. The model is similar to a consultant finding a client ways to save money on their business processes. The consultant may ask for a percentage or fee of the achieved savings since it took their expertise to find the cost reduction. This sounds good in theory and usually works well in a consultant type situation, but in the freight world this may not be a true representation of what's happening. With the gain sharing model a shipper agrees to pay a percentage or flat rate fee of the savings a broker has said to have obtained for them. For instance, if a gain share 3PL proposes that they can save a shipper $10,000 off th...

LTL carriers typically make modifications to their base rates yearly through the form of a General Rate Increase (GRI). Historically speaking, these increases occur once a year, but there have been years where there were none passed along and there have been years where there have been more than one. These increases are given with multiple factors taken into account, including but not limited to the economy and the carrier’s network and current operating ratio. An important thing to remember with GRI’s is that the announced increase reflects only the average rate increase across all lanes combined. It’s a weighted average. It isn’t necessarily indicative of the true impact the GRI will have on a shipper’s total freight costs since it’s not a flat percent increase across the board. And yes, this can work both ways for individual lanes. The impact may be less than what’s announced in some lanes, and it may be a lot higher in others. The takeaway here is that a shipper could be seri...

With capacity issues becoming more and more evident, Transport Topics and the American Trucking Association (ATA) recently reported that the March truck tonnage index was up 3.1% over March 2013. The ATA's Chief Economist, Bob Costello, said “Tonnage continued to claw its way out of the hole that was dug in December and January. However, with a cumulative gain of 2.5% during the last two months, we still have a way to go to offset the total loss of 5.2% in December and January." The brutal winter weather in the US this year coupled with the trucking industry's driver shortage, tightened government regulations, and even a shortage of diesel mechanics contributes to lower than expected US truck tonnage reported for December 2013 and January 2014.  Meanwhile, according to the Department of Commerce, new home sales in the US dropped to its lowest level in 8 months. The worst decline in home sales was in the Midwest which saw a 21.5% drop.  

The capacity crunch in the U.S. trucking industry is here and it is very real. Analysts are reporting that annual rate increases levied to shippers by the LTL carriers in the open market this year are sticking. The tight capacity constraints are a result of numerous factors including a severe driver shortage, new hours of service regulations imposed by government regulation, a harsh winter that caused delays in the movement of previously scheduled to move freight, and even shortages of diesel and heavy equipment mechanics on hand to maintain and keep carrier fleets on the road. Add all of that to the fact that the U.S economy has shown some life – even if minimal - with regards to turning around, and you have what has set the stage for the proverbial perfect storm that is changing the tides in favor of carriers instead of shippers for the first time in several years. The capacity crunch in the truckload segment of the market is also spilling over into the LTL sector, and shi...

FAK stands for Freight All Kinds, and it is an agreement made between a shipper and a carrier that allows different items falling into multiple freight classes to be billed & shipped at the same class. An FAK can be beneficial for shippers with several commodities shipping at multiple classes. This is because they help with simplifying the bill of lading and freight payment process and can also provide savings. It may not make sense or be feasible to pursue an FAK in some instances. Shipper’s volume, product mix and product types (value) are all things that a shipper and a carrier take into consideration before an FAK will be put into place. Here’s an example of where it may be beneficial: let’s say a shipper has several commodities ranging from class 50 to a class 77.5. They may consider trying to negotiate an FAK 50, which would allow all of their shipments ranging from class 50 up to a class 77.5 to be rated and billed at class 50. This would provide savings for all of th...

Before you implement any type of FAK parameters into your freight tariff, be sure to ask what claims liability limits apply to the proposed FAK. More often than not, when under an FAK, your claims liability limits per domestic shipment are greatly reduced. One damaged shipment could nullify the FAK savings.

The LTL industry standard is that concealed damage must be reported to the carrier within fifteen (15) days of delivery of the shipment in order for a claim of this type to be considered. Once concealed damage is noticed, the carrier needs to be made aware of the concealed damage as soon as possible. This can be done by calling the local delivery terminal within 15 days of delivery date. Emailing the carrier is helpful as well. The main idea here is to make sure you have and keep documentation of where someone at the carrier was notified within the 15 day window. Notification closer to the delivery date will increase your chances of receiving a settlement. Please make sure to make note of the person you spoke with, time and telephone number. Additional notes of the conversation with the terminal may also be made for future reference if required.  Very Important: ALL packaging that went with the specific shipment must be retained for the carrier’s inspection. F...