LTL Freight News

There’s no doubt the ruse of free freight can be very attractive to buyers. Many companies insist on free freight being included in their purchasing agreements and negotiations and will also make large purchases from vendors to qualify for it. There is no such thing as free shipping. Freight is never free. Someone has to pay for it.  When sourcing products, having free freight included in the purchasing agreement may feel like a win, but you are paying for the freight cost somewhere else in the cost of the product. Free freight is often used as a psychological selling tool, with the actual freight cost simply factored into the price of the goods you ordered. Some vendors will use this to their advantage and solicit business with the lure of free freight on qualifying bulk orders knowing that companies will place larger than normal orders simply to qualify for it. The problem with placing orders big enough to qualify for free freight is that, in some cases, it requires a company to ...

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...

The fact that as a nation the United States is facing a big truck driver shortage shouldn’t be a secret unless you've been living elsewhere for some time. Currently there is an estimated shortage of 30,000 drivers, and according to the American Trucking Association the anticipated driver shortage is going to hit 239,000 by the year 2022. But there is another problem coming into play soon that may actually make it worse: electronic log books. It's estimated that 75% of the industry is currently without electronic logging devices. In early 2015 there is a government mandate going into effect that requires commercial vehicles to have an electronic logging device. Once this is in place it will make it harder for drivers to dodge the hours of service rules. The way it stands now, trucks without electronic logging devices have a significantly lower chance of getting caught breaking the hours of service rules, especially if operated by a driver who knowingly wishes to manipulate hi...

Truckers have been hit with many blows recently, including the hours of service changes, higher operating costs from aging fleets, and insurance requirements. The aforementioned items have done nothing but hamper the situation when it comes to the driver shortage in the trucking market. Rates are going to have to rise in order to help even out the demand, or else there will be continual backlogs of freight and service issues. Something has to give. Yesterday, the American Trucking Association released that the For-Hire Truck Tonnage Index increased by 1.3% in July. The ATA's Chief Economist, Bob Costello noted “The solid tonnage number in July fits with the strong factory output reading and a jump in housing starts for the same month. I continue to expect moderate, but good, tonnage growth for the rest of the year.” The railroads are seeing the benefit of the driver shortage, but that still doesn't do away with the need for the drivers once the rail is at the unloading destinat...

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...

The reasons for the driver shortage can be debated amongst several issues, but the bottom line is that freight companies have been turning down business because they already have enough problems dealing with the business they have. In an economy where supply (capacity) and demand (freight) aren't matching up something has to give. The trucking industry is at full capacity and there is excess demand for trucks and the movement of freight. The trucks are there in many instances, but there is not enough qualified drivers to operate the tractors. "The American Trucking Associations has estimated that there was a shortage of 30,000 qualified drivers earlier this year, a number on track to rise to 200,000 over the next decade. Trucking companies are turning down business for want of workers." This is quoted from an article in the New York Times on August 9th: http://www.nytimes.com/2014/08/10/upshot/the-trucking-industry-needs-more-drivers-it-should-try-paying-more.html Wit...