the PartnerShip Connection blog
the PartnerShip Connection blog
the PartnerShip Connection blog
the PartnerShip Connection blog
the PartnerShip Connection blog
6 Considerations for Choosing an LTL Freight Carrier
03/13/2019 — Leah Palnik
The 25 largest U.S. less-than-truckload (LTL) carriers collectively brought in $34 billion in revenue in 2017. That is a staggering number and a 7.8% increase over the previous year. When the numbers are in for 2018, don’t be surprised to see another healthy rise. As the largest LTL carriers continue to command more of the overall marketplace, shippers must be resourceful when looking to source LTL freight services so as to not get squeezed on price due to the number of market players. Shippers should take the following six factors into consideration when finding the most efficient LTL freight services.
- Transit Times - How fast do you need to get your shipment to your customer, or to receive your shipment from your vendor? Long-haul carriers tend to have slower transit times in regional lanes, while regional and multi-regional carriers are much faster in these lanes, but may not provide service in longer haul lanes.
- Geographic Coverage - Once you get beyond the top 10 LTL carriers, most of the remaining players provide only regionalized direct pickup and delivery services. Understanding carrier coverage areas helps you optimize which carriers are best suited for the service.
- Service Performance - On time pickup and delivery performance is not always the same. Often this depends on where your business is located relative to the nearest freight terminals. Long-haul carriers traditionally have been known to provide lower delivery reliability, while regional carriers tend to provide reliability in a higher range. Almost all of the LTL carriers will guarantee delivery or provide deliveries that are "faster than standard" for additional fees.
- Liability Coverage - The amount of liability coverage you receive can vary and is set by the carrier. It’s not uncommon to see liability restricted to $0.25 per lb. or less, which means shippers need to be diligent about understanding their options. Especially if the liability coverage doesn’t meet the actual value of the freight.
- Financial Stability - Most of the remaining LTL carriers in the industry are pretty stable from a financial standpoint. However, there are a few carriers that continue to struggle with profitability and debt issues. Anyone who may recall when industry behemoth Consolidated Freightways closed its doors in 2002 will understand the importance of not having your freight in the hands of a financially unstable carrier.
- Pricing Factors - Lastly, and perhaps most importantly for many small business, is price. When working with an LTL freight carrier, there are many factors that will determine your true cost of transportation. These include:
- Discounts, base rates, and net price
Most LTL carriers provide pricing in the form of discounts off of base rates, which will vary by carrier. So, a 68% discount from one carrier might actually be less expensive than a 70% discount from another. The main point to consider when comparing LTL carriers is not what the discount or the base rates are, but rather what is the final net price to you.
- Minimum charge
Generally a flat fee under which the carrier will not discount its price. Some carriers offer big discounts, but set the minimum charge high which may result in less of a discount on smaller weighted shipments than you anticipated.
- Freight classification
There are 18 different freight classes ranging from 50 to 500. These classes are based on the density of your product and will definitely impact your overall price.
- FAK provisions
If negotiated, "freight-all-kinds" provisions may allow you to ship products with different classes under a single class from a pricing standpoint.
How much your shipment weighs will play a significant role in how your rate is calculated. Keep in mind that carriers will use hundredweight pricing, which means that the more your shipment weighs, the less you'll pay per hundred pounds.
- Accessorial fees
Extra services performed by the carrier generally add additional fees to your overall freight bill. The fees that carriers charge for these services can often be radically different so it's important to educate yourself.
- Discounts, base rates, and net price
There are other factors not mentioned above that need to be considered when choosing an LTL freight carrier as well, such as equipment specifications (e.g., liftgate, trailer size, etc.), scheduling flexibility, and tracking capabilities, to name a few. It's easy to see why, what may seem like a simple service of picking up a shipment and delivering it, is often more complex than meets the eye.
Generally speaking, there is almost never just one LTL freight carrier that fits every need you may have. Unless you have spare time on your hands, your best bet is to work with an established freight broker like PartnerShip that can do the heavy lifting for you so that you can stay focused on running your business.
Need some help evaluating your freight shipping? Need help finding the right LTL freight carriers? Let PartnerShip provide you with a free, no-obligation quote to get you started.
Click to read more...
Freight Class Explained: FAK FAQs
02/27/2019 — Jen Deming
There seems to be an endless number of factors that can affect freight class, and in our last two blog posts, we covered the most significant, including product category, materials, packaging, and density. When we talk freight class with our customers, many shippers ask about a potential or existing FAK (Freight All Kinds) rating, and whether it's getting them the best pricing possible. yes, we're throwing another shipping acronym in the mix. We'll take a look at what it is, which shippers quality, and whether or not it really is right for your business.
What is an FAK?
An FAK is a class agreement that is established between a carrier and a shipper, allowing the shipper to move multiple products of different classes at one standardized freight class. Essentially, an average class of all the commodities being shipped is determined, and the shipment gets rated at the same class regardless of the product type, making the price fair for both the carrier and the shipper.
How does this differ from a class exception?
A class exception agreement utilizes an umbrella system that may rate a range of actual class items at a lower class. For example, a business that may ship items classed at 70-200 may be rated at a class 150. Anything above class 200 would ship actual class. A true FAK is extremely rare for a shipper to negotiate with a carrier, as it requires extremely high volume for carriers to determine it worth their while.
How does a carrier determine whether an FAK is possible?
As mentioned above, freight carriers really have a lot of the control and are calling the shots in many parts of the freight industry. A shipper must really be moving a high volume of loads in relatively even amounts in order for lower-classed items to offset higher-classed items, making the compromise worthwhile to the carrier. Originally, when FAK classification agreements were first implemented, they were beneficial to both parties. However, many shippers learned how to manipulate the agreement, shipping risky freight loads at a lower cost, and putting carriers in the hot seat. To combat the misuse of the system, carriers have held back in entering these agreements more now than they used to.
If you are a rockstar at optimizing the packaging and maneuverability of your high-class freight, taking into consideration density, fragility, and stowability, you have a better shot at obtaining an FAK. Basically, if you can get your freight to operate like a lower class, you may be rewarded with a lower class.
What's the catch?
If anything proves true in freight shipping, it's that nothing is as simple as it seems. An FAK can seem like an awesome idea with a few drawbacks, but even if a shipper does manage to acquire an FAK with a carrier, it doesn't mean it's exclusively beneficial. Keep in mind that carriers are in charge and the parameters in place are pretty much at their discretion. If you are not shipping lots of mixed pallet freight, it just doesn't make sense. Small to medium-sized businesses that have one or two major commodity types won't see the same benefits of an FAK as facilities that are mass producing many types of products would.
If you are typically shipping lower-classed items, keep in mind that your "average" class could potentially be higher than your actual class, because you are essentially increasing your minimum charge. It may save you on the one-off shipment, but it's hurting you in the long run. The same goes for a class exception strategy. Carriers are not likely to be open to lumping any of your shipments of a higher class into this tier, no matter how infrequent they are. Because of this, your tired structure will likely reflect a higher average class, which is essentially over-classing your shipments.
Another notable consequence of FAK implementation is that carriers will often limit liability on these shipments. In many carrier tariffs, verbiage is in place that the carrier is responsible for the price per pound on the freight class being paid. This is very different from actual class. If you are shipping a high value load at a very low class, even if the damage claim is won, the payout would be minimal compared to the value of the shipment.
What's my class?
Now that we've gone over how an FAK can affect freight class, let's take a look at an example shipment that would create a difference for shippers with and without an FAK. We can use a hypothetical where we are a shipper with an FAK agreement in place. If the actual freight class of our shipment falls within 70-200, we are rated at 150.
In this example we will be looking at a pallet of popped popcorn, in boxes, measuring 40 x 48 x 52 and weighing 315 lbs. This is a common shipment that would typically be rated as density-based, and would have a high class due to the fact its density is low. We will use ClassIT in order to determine the actual class and compare it versus the FAK.
With the search tool, we use the keyword "popped popcorn." It's important to note the distinction between popped popcorn and popcorn kernels because popped popcorn is much less dense, and a higher-classed shipment than raw kernels. Our shipment best falls into the Foodstuffs Group, which is a general group of foods, beverages, and other types of non-perishable items that are broken down into many articles usually determined by density:In this case, we will use the Snack Foods group, which is broken down into many different subgroups:Once more, we have to figure out density. In this example, our shipment density is 5.75 lbs. per cubic foot. It fits under Sub 4, or class 175. This is a pretty high shipment class, and would result in a high freight rate. In our hypothetical example, our FAK would get this actual class 175 shipment rated at a class 150. Dropping to 150 isn't a huge difference for a final freight rate, but should anything happen to the shipment in transit, it could potentially pay out much less than what the actual class would.FAK is just another added layer to the very complicated topic of freight classes. While they may sound like a great alternative to paying actual class, it's pretty clear that with the current state of the freight shipping industry, carriers are dictating the terms for shippers. FAK agreements are rare, and it's likely they aren't the best option available to lower freight cost anyway. The most important thing for shippers to consider isn't an FAK or even a discount percentage - it's what you are paying for your freight. A qualified freight broker can help alleviate the stress of shopping rates, and make sure you are paying for freight at the class that's right for you.
Click to read more...
Freight Class Explained: Demystifying Density
02/20/2019 — Jen DemingSo, you've been brushing up on freight class and you're starting to get a hang of how it's determined. In the first part of our freight class series, we learned that packaging, commodity type, and dimensional features all influence the final code that ultimately affects your shipping price. Just when you thought you had a handle on the basics, we're going to throw you a little curveball. Some commodities have an added layer of mystery (and math) when it comes to their class: the density of the overall shipment. Let's sharpen some pencils and get down with density-based freight classifications.What is density?First thing's first, density is a method of measurement that relates the weight of your shipment to its dimensions, or pound per cubic foot. Typically, the higher the density, the lower the classification and vice versa. A good example of a high density shipment would be a pallet of bricks. Lower density shipments, or those that take up lots of space but are lightweight, are items such as ping-pong balls.Why are some shipments density-based and what are they?Commodities that are solid, heavy, and take up minimal space are very desirable to pretty much any freight carrier. Using density as a factor in determining freight class and pricing is becoming the new standard, especially as freight demand increases and capacity decreases. Thanks to variables such as a shortage of drivers and strict trucking legislation, carriers are trying to weed out difficult or unprofitable shipments in order to make space for more standardized loads. Time and effort are money in this industry, and carriers are taking control of who they want to ship for.How do you calculate the density of a shipment?Density is calculated by measuring the height, width, and the depth of the shipment, including skids and packaging. This is multiplied to determine cubic inches. If you have multiple pieces, multiply for each piece and add them together. Then, divide the total cubic inches by 1,728, or the total cubic inches in a foot. The result is the total cubic feet of the shipment's pieces. Divide the weight (in lbs.) of the shipment by the total cubic feet. The result is pounds per cubic foot, or density.What is my freight class?To help you better understand density-based shipments, we will look at a shipment of steel machinery parts, in a crate measuring 42 x 46 x 42 inches and weighing 500 lbs. By using the search function in ClassIT for "machinery parts", we can see a broad grouping for 114000, or the Machinery Group:Through this group, we are directed through sub-articles, where we can find the 133300 group "Machinery or Machines, NOI, or Machinery or Machine Parts, NOI". From there, we can view associated subgroups that refer to density and packaging:
You may also notice the "NOI" designation for this particular breakdown. "NOI" refers to "not otherwise indicated" and was implemented by the NMFTA for commodities that do not easily fit into existing classifications. Using NOI can be risky, since most products do have a specific freight class. Since "NOI" designations tend to draw attention from carrier inspection teams, it's critical that they are used properly, and that means density must be calculated to determine the subgroup.In this example, and using the formula listed above, we can determine density using its dimensions and weight.
- Multiply the length, width, and height (42 x 46 x42) to get the total cubic inches (81,444).
- Divide the total cubic inches by 1,728 to get the total cubic feet (47).
- Divide the weight of the shipment (500 lbs.) by the total cubic feet (47). This will give you a density of 10.65.
Looking at the chart, we see that because of our crated packaging type, the top 4 subgroups are applicable. 10.65 falls under the subgroup 3, or class 92.5. In this class example, it is important that dimensions and weight are accurately measured in order to calculate the true density (and appropriate class) for the shipment. It's also crucial to note once more that packaging makes a huge impact. See how high the classes jump if the product is palletized or in packages other than secure crates or boxes.
LTL services are in higher demand than ever before. National freight carriers are in the driver's seat, and doing what they can to limit troublesome shipments - including those with a low density and high freight class. Once you've optimized your shipments for carriers, many shippers wonder about whether a Freight All Kinds (FAK) agreement may be a worthwhile perk. Next, we'll take a look at what goes into that FAK and if it's right for your business. The freight specialists at PartnerShip can guide the way so you aren't stuck staring at your calculator, and a high freight bill. Call 800-599-2902 to speak with a representative, or get a quote today.
Click to read more...
- Multiply the length, width, and height (42 x 46 x42) to get the total cubic inches (81,444).
Freight Class Explained: Bring on the Basics
02/13/2019 — Jen Deming
Freight class is a critical component of shipping your LTL loads. But it's confusing and making a guesstimate is risky business. Your shipment's freight class plays a huge part in from everything from your initial freight rate estimate to your payout for any potential damage claims. How can a little number mean so much?
What is a freight class?
Prior to understanding class number, shippers need to grasp the importance of the NMFC, or National Motor Freight Classification. Every type of product or commodity has a numeric code assigned to identify it within a categorical system, similar to a UPC used within a grocery store. The code also breaks down these products into over-arching groups, which then tell you how to class your product. There are 18 freight classes that range from 50 to 500. Your freight class helps the carrier determine how much to charge for your shipment, along with other factors such as weight and distance traveled, as well as any additional requested services. Typically, the higher the class, the more expensive the subsequent freight rate.
What factors determine a freight class?
There are four factors that influence the classification of different commodities; each affects the difficulty in transporting the freight and increases the freight class.
To better understand the differences in freight classes, and how they are determined, looking at a few types of our most commonly shipped commodities can be insightful. As an example, we'll take a look at stone materials. While many shipments of stone are transported via truckload carrier, and don't need a classification listed on the shipping paperwork, there are still many instances where quarries, fabricators, and other stone suppliers need to move smaller loads for shorter distances.In order to help shippers determine freight class, the National Motor Freight Traffic Association has created an online reference tool, ClassIT. The resource is available to shippers with a membership, and it's the primary tool used by PartnerShip shipping specialists. The index can be searched by using a brief description of the commodity. Being too specific, or too vague, can create issues in your search results. Note you can search by including "any word" or "every word" to adjust your results.Let's say we have a shipment of slate blocks which are in 3 creates that are 4 ft. by 4 ft. and 515 lbs. each. We see two groupings that actually fall into the same Item or NMFC number, which is 90280. This is considered the "Gravel or Stone Group; consisting of gravel, sand, slag, slate, or stone, as described in items subject to this grouping." If we select "Slate Blocks, Pieces or Slabs, NOI" we are brought to the following breakdown of articles. You can see how specific it gets regarding packaging, usage, and dimensions.By looking at our shipment of crated slate blocks, we can see that our sample shipment falls under the 90280 Slate Blocks Pieces or Slabs group:
- Density - The space an item takes up as it relates to weight. The higher the density, the lower the classification. Low density shipments take up a lot of space but weigh less, making the shipment unprofitable to carriers. More classifications are becoming density-based as capacity becomes crunched and larger, less standard types of freight are entering the network to be shipped.
- Storage/Stowability - This refers to how easily freight can be stored and stacked on the truck, and how much space it takes up. Similar to density, if a shipment is large, oddly-shaped, or difficult to fit in the truck, the load becomes undesirable. .A higher freight class is assigned in order to reflect the added work to fit in the load.
- Handling - Similar to storage and stowability, the more difficult it is to load and unload a shipment affects freight class. A shipment that requires more creativity and flexibility to load and unload will increase the class.
- Liability - Carriers assign higher freight classes to "high risk" shipments in order to limit their accountability for those shipments that are more likely to be damaged in transit or have an increased risk for freight theft. If you have high value or fragile products, it will be reflected in a higher freight class to offset that risk.
It goes even further than that, breaking down into subgroups which determine freight class depending on packaging and size. This is why it is imperative to know the precise weight and dimensions of your shipment. In our example, our slate blocks are in crates 48 in. long, which falls under the subgroup 4 - class 65. Compare that to crated slate blocks longer than 96 in., which would be class 85. This is an increase, but shouldn't affect pricing drastically. When packaging type is adjusted, however, the class is increased significantly. By palletizing the slate blocks (subgroup 1), freight class jumps to 250. At this weight, the final freight rate can be raised by hundreds of dollars.
In the Slate Blocks, Pieces or Slabs group, you can also reference three separate notes that are relevant to the details of the shipment:
These details are notable, because it gives further direction on how best to package your freight for both safety and security. In 90282, the note states that "pieces or slabs 2 in. or less in thickness" must be boxed or crated and marked "fragile." We see more packaging direction in 90283 regarding exposed surfaces and edges and requirement for wrapping and other protection. This is to hopefully limit damage, but shippers must also be mindful that if freight falls within this category, and it is not packaged as directed, a damage claim will likely be denied by the carrier.Freight class, in addition to weight and distance traveled, is critical in determining a shipment rate. Specific details relating to product and packaging can greatly affect the NMFC code and final freight class. A shipment of slate blocks may sound simple enough, but things can get a bit more complicated once you start looking at different commodities. Density-based shipments can further befuddle shippers, and understanding these types of classifications is the next type of class breakdown we will tackle. The experts at PartnerShip can lend expertise so you can stop scratching your head. Call 800-599-2902 to speak with a representative, or find your freight class online.
Click to read more...
ArcBest: Delivering New Shipping Solutions to PartnerShip
01/23/2019 — Jen Deming
PartnerShip® is always working to expand our available carrier network in order to meet every customer's shipping needs, every time. For those customers who value premium service and an unmatched experience, we are pleased to announce the addition of the ArcBest® network to our comprehensive group of partner carriers. With an extensive transportation solution network, ArcBest offers superior less-than-truckload (LTL) service through ABF Freight® as well as specialized time-sensitive alternatives through Panther Premium Logistics®. These additions help elevate available logistics options for PartnerShip customers.
ArcBest offers a variety of stand-out services that benefit customers with specialized or unique needs. In addition to a full-service network of transportation options such as intermodal, supply chain services, international shipping, warehousing, and distribution services, ArcBest also provides premium time-critical and event shipping solutions. In addition to these options, the ArcBest company umbrella of carriers brings even more unique benefits for shippers.Shorter, Pup-trailer OptionsA standard 53-foot enclosed trailer, or dry van, is the most common truck type used to move freight. The height of the trailer is 8.5 to 9.5 feet. There isn't much differentiation between trucks aside from the door type, which can either swing open or roll up. This is a sizable truck, and not every pick-up or delivery location is equipped for proper vehicle maneuverability. This presents challenges for loading and unloading. ABF Freight, a premier ArcBest freight carrier, commonly utilizes shorter pup-trailers, not 53' vans. A pup-trailer measures between 26 and 29 feet in length. Due to this smaller size, congested access points such as a busy side street or challenging dock configuration, like a school, can be more easily navigated.Unique Freight CapabilitiesMost common carriers are very specific about what they will move for shippers, and what they will refuse. Odd, over-sized items and easily-breakable commodities are determined risky for freight carriers, and shippers are usually refused pick-up, often at the discretion of the local terminal. Carrier Rules Tariffs are frequently being updated as capacity continues to crunch, allowing common carriers to become more selective about what types of products they choose to move. Items such as flag poles, furniture, and other challenging density-based commodities are accepted by ArcBest carriers, making them an excellent option for shippers who may have a challenging freight move.Terminal Direct Scheduling and Contact InfoAnother special service that ArcBest offers for shippers is terminal-direct scheduling and available contact information. If you've ever had to schedule your own pick-up, or tried to contact specific terminals to check on freight, you know that carrier websites are almost never transparent. Most often, you will need to go through an automated number and exhausting phone tree in order to access a service representative. Some carriers don't allow shippers to connect to specific terminals at all. This can be frustrating when time is compromised and your shipment is being delayed. Speaking to a particular terminal allows for better tracking, accountability, and clarification for customers. ArcBest, in particular ABF Freight, makes this a critical option for shippers.Expediting in TransitThe added ability to expedite ground LTL shipments while already in transit is a service now available to PartnerShip customers through Panther Premium Logistics. Panther, an expedited carrier option under the ArcBest umbrella, is a convenient choice for customer's time-critical shipments. With a variety of truck equipment options, from sprinter vans to flatbeds, Panther offers premium logistics solutions for those who may have unique shipping requirements. If the deadline for your shipment delivery is sooner than you anticipated, Panther has the ability to bump up your service from standard ground LTL to expedited delivery while in transit.Added BenefitsIn addition to these distinct solutions offered by the ArcBest umbrella of carriers, there are a few other notable benefits suited for shippers who value quality and exceptional experience:
- The carrier network extends nationwide, providing reliable transportation that fit both regional and long-haul markets.
- In line with providing premium shipping and handling services, ABF Freight also boasts one of the lowest LTL claims rates in the industry.
- ABF Freight prioritizes meeting customer pick-ups, making sure your shipment gets moving when it needs to so you meet your deadlines.
We know that every shipper has individual needs for their business and their shipping. By adding another carrier we are able to extend available service options for customers - helping to broaden our network and meet those needs. If you'd like to learn more about ArcBest shipping options, contact us and we'll help determine which solutions are right for you.
Click to read more...
How to Calculate Freight Density for Shipping
01/11/2019 — Leah Palnik
Density is a major factor in determining your freight class and your total shipment cost. In fact, many LTL carriers are relying more and more on freight density over actual weight to determine your rate. That's why it's important that you understand what freight density is and how to calculate it.
Freight density defined
Freight density measures how heavy a shipment is relative to the size of the shipment. The higher the density, the lower the classification and vice versa. A shipment with a high freight density weighs a lot relative to its size, such as densely packed books. A package with a low freight density weighs little relative to its size, such as a box filled with Styrofoam.
How to calculate freight density
Step 1. Measure the height, width, and depth of the shipment in inches. Measure to the farthest points, including skids or other packaging. On shipments with multiple pieces, repeat Step 1 for each piece.
Step 2. Multiply the three measurements (height x width x depth). The result is the total cubic inches of the shipment. If you have multiple pieces, multiply the height x width x depth for each piece. Take the results for each piece and add them together to get the total cubic inches
Step 3. Divide the total cubic inches by 1,728 (the number of cubic inches in a cubic foot). The result is the cubic feet of the shipment.
Step 4. Divide the weight (in pounds) of the shipment by the total cubic feet. The result is the pounds per cubic foot, i.e., density.
- For multiple pieces, add the weight of each piece together before dividing by the total cubic feet of the shipment.
- Round fractions to the nearest full cubic foot number.
Calculating freight density will also provide you with a recommended class for your shipment. The freight class chart below is an abbreviated scale you can use to help estimate the freight classification for your shipments.
There are many factors that determine your freight class, aside from density, so these are estimates only. If you're looking for help to find your freight class, our team is standing by. For a quick and easy way to figure out your shipment density, check out our freight density calculator.
Click to read more...
Picking Your Pallet Type: How to Best to Support Your Freight
10/25/2018 — Jen Deming
Not all pallet types are created equal. While it's always smart to properly palletize your freight shipments, construction style and material can vary more than you'd expect. Some structures are better suited for certain types of loads. Before you can understand the best way to organize and stack your freight on a pallet, it's helpful to know the advantages and disadvantages of each type, so that you can better secure your freight and protect yourself against potential damage and loss.
Pallet Structure Types: Stringer vs Block
A stringer pallet is a pallet structure that uses "stringers" (2x4 or 3x4 pieces of board) sandwiched between the top and bottom decks to help support the weight of the load. Sometimes, stringer pallets are notched along the bottom deckboard to allow for partial fork lift entry on all sides. Otherwise, typical construction can limit mobility via forklift.A block pallet uses around 4-12 blocks of solid wood or plastic to support the weight of the shipment resting on the top deckboard. Because the pallet construction uses multiple pieces with open spaces at the bottom, there is better allowance for forklift entry on all four sides, allowing for easier lift and mobility.
Now that we've covered the two basic pallet structures, shippers need to understand the differences in construction components so your valuable freight doesn't get damaged. Different industries and commodities require different specifications based on the load. There are 4 primary material groups when it comes to pallet types: wood, plastic, metal, and corrugated paper. Each has its own advantages and disadvantages regarding cost, durability, availability, and sustainability.
Wooden or plywood pallets are the most recognizable and commonly used pallet type for a wide variety of industries.
- Advantages: These pallets are the cheapest and also easiest to customize for a commodity's specific needs. They are typically reusable and can hold up in multiple transits. If they are damaged in transit, wooden pallets are very easy to repair. They are easy to stack, and the used wooden materials are popular to re-purpose for mulch, paper, and other project construction.
- Disadvantages: Wooden pallets become fragile after carrying heavier loads and are at risk to weathering, splitting, and splintering. This pallet type can be heavy and therefore more costly to ship. Wood is difficult to clean and porous, growing both bacteria and mold, so food, beverages, and chemicals aren't ideal commodities to ship using this type of pallet.
Notably more expensive than wood, plastic pallets are a great all-around option for those shippers willing to shell out a bit more.
- Advantages: While being the most lightweight of available pallet material options, plastic is still super durable and ideal for heavy loads. The material is easy to clean (safe for transport of food products) and are generally stress, heat, and weather resistant. Plastic pallets are easily recyclable and can be quickly ground down and turned into new pallets. Since they are often made of a single piece with no screws or other hardware, they can be safer to handle than standard wooden pallets.
- Disadvantages: Plastic pallets are pretty inflexible. If they break or crack, it isn't cost efficient to fix, and they have to be melted down and remolded entirely. Because of this, and the effort that goes into making them, they are at a distinctly higher price point than some other pallet types.
Strong and resilient, this premium option is one the the least common pallet types, but a very sturdy alternative for certain industries.
- Advantages: Metal (often aluminum) pallets are a great option used for transporting heavy goods because they are the sturdiest and most secure alternative. They are also excellent for businesses moving foodstuffs because of sanitation and safety. They do not break down or rot easily, and are not susceptible to warping or splintering like wood. They are less easily recyclable, but can still be melted down and reused.
- Disadvantages: Up-front initial costs for the purchase of metal pallets is very high. While very durable, these pallets are also extremely heavy, so keep in mind the actual transportation cost may be higher as well.
Corrugated Paper Pallets
As the newest pallet type on the block, this environmentally friendly option is becoming more popular across a variety of industries.
- Advantages: Corrugated paper pallets are lightweight but still strong enough for moderate shipments and typically less expensive than more commonly found wooden pallets. They are completely recyclable and transportation costs are typically lower due to their weight. Because they are intended to be "single use" by nature, they are more sanitary than wooden and plastic pallets.
- Disadvantages: Paper pallets cannot withstand extreme weather conditions, and they are more easily damaged by forklifts and during loading/unloading. Because they are not very reusable, while they are cheap, replacement costs can get pretty high if you are shipping frequently.
While it's pretty common knowledge that you can better protect your freight by palletizing your shipments, it may come as a surprise to many shippers that there are so many different pallet types. Advances in the construction of the basic pallet have greatly improved both durability and cost. Pallet building materials and the engineering of the structure can literally make or break your load. If you would like to learn more about how to best package and palletize your freight, download our free white paper below!
Click to read more...
Common Accessorial Fees Explained
10/22/2018 — Leah Palnik
Additional services required outside of the standard shipping and receiving procedures result in additional fees called “accessorial fees” to cover the extra costs incurred by the LTL carrier. These fees make up just one part of your freight costs, but can be a challenge to account for since they are often applied after the shipment has been delivered. We’ve compiled a list of common accessorial charges with a brief description of each, so you can learn how to plan for them and avoid them when possible.
- Lift Gate Service
When the shipping or receiving address does not have a loading dock, manual loading or unloading is necessary. A lift gate is a platform at the back of certain trucks that can raise and lower a shipment from the ground to the truck. Having this feature on trucks requires additional investment by an LTL carrier, hence the additional fee.
- Inside Pick Up/Inside Delivery
If the driver is required to go inside (beyond the front door or loading dock) to pick up or deliver your shipment, instead of remaining at the dock or truck, additional fees will be charged because of the additional driver time needed for this service.
- Residential Service
Carriers define a business zone as a location that opens and closes to the public at set times every day. If you are a business located in a residential zone (among personal homes or dwellings), or are shipping to or from a residence, the carrier may charge an additional residential fee due to complexity in navigating these non-business areas.
- Collect On Delivery (COD)
A shipment for which the transportation provider is responsible for collecting the sale price of the goods shipped before delivery. The additional administration required for this type of shipment necessitates an additional fee to cover the carrier's cost.
Shipments containing articles greater than or equal to twelve feet in length. Since these shipments take up more floor space on the trailer, additional fees often apply.
- Fuel Surcharge
An extra charge imposed by the carriers due to the excessive costs for diesel gas. The charge is a percentage that is normally based upon the Diesel Fuel Index by the U.S. Energy Information Administration.
- Advance Notification
This fee is charged when the carrier is required to notify the consignee before making a delivery.
- Limited Access Pickup or Delivery
This fee covers the additional costs required to make pickups or deliveries at locations with limited access such as schools, military bases, prisons, or government buildings.
- Reweigh and Reclassification
Since weight and freight class determine shipment base rates, carriers want to make sure the information on the BOL is accurate. If the carrier inspects a shipment and it does not match what was listed, they will charge this fee along with the difference.
Your PartnerShip dedicated team of shipping experts is here to help you navigate the many nuances of LTL freight accessorials fees to determine which services you do or do not need and ensure the most cost effective price. Carriers generally publish a document called the "Rules Tariff 100" which provides a list of current accessorial services and fees. PartnerShip representatives are well versed in these documents and are happy to help with any questions you may have.
Want a more in-depth look into freight accessorial fees and how to avoid or offset the added costs? Check out our free white paper!
Click to read more...
- Lift Gate Service
New Excessive Length Restrictions You Can't Afford to Ignore
09/18/2018 — Jen Deming
It's a tough time for shippers and carriers alike. It's no secret that the current capacity crunch is affecting freight rates and transit times, but now shippers are facing new excessive length restrictions as well. As the number of available freight shipments continues to increase at a record-setting rate, carriers simply cannot keep up. In an effort to free up for space for available loads, XPO will be implementing new restrictions on certain types of shipments. What are the changes being made, and what else can shippers expect from freight carriers as capacity continues to tighten?
XPO will be making a few specific changes that will affect the excessive length policies currently in place. The primary change that will affect customers is the following:
- As of 9/24, XPO will no longer pick up shipments of pipes or bars that are not crated, regardless of length. Leading up to the 24th, all items should continue to move without problem unless over 20ft or more, which would be determined at the service center level
To summarize, if you are shipping pipes or bars of any length, they must be crated - simply palletizing your load will earn you a missed pick-up. Some shippers like to save time by combining multiple commodity types of different classes onto one pallet and one bill of lading. If you are used to combining your multi-class shipments into one load, and it includes bars or pipes, crate them separately from the rest of your freight and create an individual BOL. XPO has created a packaging guide with notable rules of thumb to help properly package your shipments and gives further insight into excessive length articles.
The active phasing out of excessive length shipments by XPO is anticipated to have a favorable impact on current available carrier capacity. It's a safe assumption that other carriers may follow suit. Many common carriers do not have the specific equipment needed to properly move long freight safely and efficiently. Historically, excessive length freight contributes to more damage claim submissions and creates much more wasted space than a standard dimensional shipment. This means less freight can be loaded into a truck at a time, and this can lead to an increase in missed pick-ups and longer transit times for other shippers.
Some carriers have already adopted special charges for small package ground shipments that are considered oversized. FedEx and UPS both charge higher surcharges on these types of shipments in order to discourage shippers from moving them. These fees range anywhere from $80 up to $500 on top of regular service cost, depending on the carrier and package size. Right now, many freight carriers already have excessive length fees in place, and it's entirely possible that carriers that do continue to move oversized freight loads may implement increases or initiate the same sort of surcharge system in the near future.
For customers who are shipping commodities that are consistently rated excessive length, it may be time to consider looking into truckload service options. Moving full truckload is a great alternative for businesses shipping many pallets of product at a time, but it's also a secure and efficient option for those who have fragile, large, or high-value freight. With this option, you pay for the cost of the space you take on a full 53' truck. Freight class doesn't affect your rate, and you may have more flexibility with packaging. Added security and quicker transit times typically are additional benefits. Depending on the length of your haul, a dedicated truck may be costly, but a freight broker can help look into partial truckload options that may better fit your budget. Whatever freight shipping option works best for you, it's a good idea to look into all available choices as the transportation industry continues to evolve.
The capacity crunch is an ongoing challenge, and carriers are responding by changing the industry as we know it. Pricing for both freight and small package services is rising, and policies are being adjusted to make room for an increase in demand. Working with a quality freight broker can help steer you in the right direction and make sure you are shipping smarter. Contact PartnerShip at 800-599-2902 or email sales@PartnerShip.com today.
Click to read more...
5 Key Things to Know About Shipping Stone
09/12/2018 — Jen Deming
One of the most common, and most difficult, commodities being moved either LTL or full truckload is natural stone materials. These are used mostly for construction projects, both residential and commercial. The stone can be cut, crushed, blocked, or moved upright in slabs, and each come with different requirements for packaging and handling. As dense and heavy as stone is, it can be very fragile, brittle, and difficult (not to mention dangerous) to transport. Whether you are going either LTL or full truckload for your stone shipping, there's a slew of potential complications you need to be aware of in order to ship safely and securely.
1. Packing and Packaging
First and foremost, proper packing and packaging materials are very important for stone shipping. In the most ideal of scenarios, smaller freight shipments can be packed in custom crates, with built-in foam material for cushioning. The crate shouldn't be too large, and should contain minimal extra space to limit movement of the product inside. Stone material can be separated in bags within the crate for easier removal and distribution upon delivery. Customized crates can be a little pricey, but it's well worth the extra cost in security. This is especially true if you are moving through an LTL carrier. In that case, your stone will likely be loaded and unloaded several times throughout the process, both initially and through terminals during transit.
Palletizing your stone shipments is another recommended option for larger freight loads, and are often stacked with wrapping materials in between to prevent scraping. Ideally, a specialized piece of equipment should be used to transport stone shipments cut into slabs, called an A-frame. Typically, these are made of both wood and steel and include a base with A-shaped bars angling upward acting as a sturdy support for heavy slabs. They can be used for both storage and transport, and many have wheels that can be locked into place or removed. These frames can be loaded onto the truck by either forklift or crane.
2. Trailer Types
There are many truck types that are able to transport stone, and the equipment required depends on how the stone is packaged.a 53' dry van (enclosed trailer) with swing or roll-up doors will work well for most smaller shipments going LTL. Shipments are loaded at the rear, using a loading dock and forklift. If a loading dock is not available, some trailers have lift-gates, but this additional service does come with a fee and makes it more difficult to find available trucks. It's important to note that palletized shipments of stone are generally not recommended to go LTL, unless plenty of corner guards, foam or other packing materials are being wrapped with the product.
There are a few additional trailer-type options for truckload stone shipping. A flatbed is an extremely popular trailer type that is widely used for its versatility. There are no sides so the deck is open, and freight is typically loaded over the sides and the rear. A step-deck or drop-deck is a variation of a flatbed that consists of both a top and bottom deck. The lower part is designed to haul freight that may be too tall to be hauled with a standard flatbed. Additional open deck options include RGN (Removable Gooseneck Trailers), stretch RGN, or low-boys. All of these options are designed to be used for exceptionally tall or long freight loads. These open types of trailers will most likely require straps, chains, or tarps to help protect the freight from wind or weather damage and will need to be requested by the shipper so that the carrier is prepared. A conestoga is a trailer that comes with a roll-up tarp system that creates sides and a top to offer protection of the freight, which is an added benefit to fragile stone shipping. Keep in mind, due to the specialized nature of these pieces of equipment, they may be more expensive and more difficult to find.
3. Over Dimensional Concerns
It's very common for large stone orders or building materials to be over dimensional when going full truckload. Knowing what to expect when it comes to legal requirements and how your shipment may be affected are very important in planning the haul. Every state has different legal requirements for obtaining a permit in order to transport over-sized freight. There are not only restrictions on hours of operation varying by state, but also restrictions on drivers for hours of service - meaning there is less time your shipment can be on the road. As the shipper, it's crucial to plan as much as possible beforehand and to give accurate estimates for transit time. It may be smart to plan an extra day or two when communicating with your customer. Since the load will more than likely go through checkpoints in each state it travels, each stop stop can potentially hold up your load. Make sure your drivers are prepared with the necessary permits, paperwork, and commodity information (likely including product spec sheets and packing slips).
4. Insurance Coverage
Due to the fragility and potential hazards and risk for damage in shipping stone, making sure you have proper insurance coverage is crucial. Carrier liability is typically limited, especially for LTL common carriers. So, if your shipment and damaged in transit, the probability that you will receive full compensation for the value of your product is very unlikely. Usually, in LTL shipments, the payout depends on a dollar per pound amount based on the class and commodity. In order to get this payout, you will need to go through all of the necessary steps to file a claim and prove the carrier is at fault for damaging your shipment. It can be a tedious process with a very limited return. Many shippers find it much more beneficial to obtain additional freight insurance to have more complete coverage of their freight.
Truckload carriers are required by the FMCSA to meet specific primary insurance minimums. Cargo liability is the type of insurance that covers your freight while it is in transit. Typically, up to $100,000 in cargo liability is covered, but it's important to note not all types of commodities are covered. Restrictions can vary depending on insurance company, so it's always a good idea to look into purchasing additional cargo insurance to be sure your freight is covered.
5. Accessibility of Site/ Unloading Teams
Another huge challenge for shippers moving stone materials is accessibility of the pick up and delivery locations. Oftentimes, these loads are being picked up directly at the quarry, and it can be difficult for the driver of a 53' dry van or a flat bed to maneuver in these locations. Delivery can be at construction sites, or even residential lots, which poses even more difficulty for drivers. It's important to know that the driver of your delivery truck typically will not assist in the loading or unloading of your freight. And with thousands of pounds of hard-to-move, bulky product, you need to be prepared and have a well-trained and reliable team ready at your disposal - possibly even after hours. Most truckload carriers charge detention after 2 hours for loading/unloading, which means extra money in fees off your bottom line. The time can go quickly, so have any equipment and areas cleared that are needed for loading and unloading. Being better prepared on the front side can save you lots of money and time wasted later on.
Stone shipping is one of the most challenging and problematic types of freight shipping out there. It's also very common. As both commercial and residential builders are more frequently using natural stone in their designs, the demand for transporting these materials is increasing exponentially. Stone shippers have to equip themselves with as much knowledge as possible about the many issues that may arise both during and before and after transit. Being well-informed is the best way to ship as smart and as securely as possible while minimizing the potential for costly damage. Working with a freight broker can lend you some expertise from finding reliable and vetted carriers, to knowing just what type of equipment you need to get your freight to its destination safely. Contact PartnerShip for your next stone shipment!
Click to read more...
For Good Measure: How to Avoid Freight Reweighs
07/26/2018 — Jen Deming
LTL shipping requires plenty of diligence and double checking on behalf of the shipper. All may seem in order: you've used proper packaging, paperwork is up to date, shipping addresses reviewed, accessorial requirements checked, and you are confident you are using the proper freight class. Then it happens. Your shipment is delivered safe and sound, but when the invoice arrives, your bill is nearly $100 over what you had anticipated. On further review, you learn you've been hit with a reweigh fee by the carrier. How did this happen?
Freight reweighs are becoming more and more frequent, especially as dimensional and density based pricing becomes more common. It's important to understand what constitutes a reweigh, and what puts your shipment at risk. Many shippers, particularly small businesses, do not have certified scales that are large enough to accurately measure a larger LTL (less-than-truckload) shipment. This means that many of the weights listed on the BOL (Bill of Lading) are approximations, and carriers are pretty vigilant at checking for inaccuracies with their own certified equipment. A freight reweigh occurs when a carrier inspects and weighs the shipment and when the actual weight and the weight listed on the BOL do not match. One of the primary factors used to determine freight cost is weight, and in many cases, affects freight class as well. Often, a carrier will charge not only for the difference in weight, but also a fee for the freight reweigh itself.
To avoid a freight reweigh, it is so important that shippers try to avoid "guessing" their shipment weight. If your business does have a certified commercial scale, you are a step ahead of many other shippers. Be sure to have it calibrated and checked frequently to avoid miscalculations. If you do not have a scale, it is key to obtain accurate measurements and weights for ALL of the materials being shipped. This can be even more challenging if you are shipping an assembled, finished product made up of several separate pieces and different classifications. Add up materials used on product spec sheets, catalogue listings, and product invoices to get as accurate a weight as possible. It can be beneficial to look at any inbound shipping invoices for any pieces of your finished product that were shipped to you as a supply order. In short, don't be tempted to take shortcuts. It pays to take the time to measure individually and make educated and precise estimates.
Another mistake that many shippers make that encourage freight reweighs is neglecting to include packaging/packing materials in their calculation of gross weight. An average 48x40 pallet weighs around 30-40 lbs, and if you are shipping a multi-pallet load, that extra weight adds up fast. While it's always best to avoid guessing your shipment's weight, in the case shippers aren't able to weigh their shipments on a calibrated scale, it is important to factor this figure in the total. Additional materials used to protect your shipment such as molded plastic corner reinforcements, fiberboard, wooden stabilizers, and even foam inserts can increase weight, especially if you have a larger LTL shipment.
It's key to remember that accurate weight is not the only factor that affects your shipment- it helps to determine your freight class, as well. For heavier, denser items that fall into the lower NMFC classifications, total weight of the shipment is used to calculate at price-per-pound. For less dense shipments that take up more volume, your freight class can be higher and your shipping more expensive. If you happen to overestimate the weight of your shipment, and it falls into one of these higher freight classes, you will be charged more at the higher freight class. It is crucial for shippers to know their precise weight, freight class, and your freight density in order to estimate accurate shipping charges.
Even if you feel you've got everything in order, freight shipping can always lead to some surprises. While it's never a good idea to cut corners or knowingly try to mislead a carrier in the hopes of saving a couple bucks, sometimes even thorough shippers can get hit with some unforeseen charges. Don't let freight reweighs be one of them. The freight experts at PartnerShip have your back and can help make sure you are shipping smarter. If you have questions about determining your freight class or how working with a 3PL can help lower your shipping costs, call 800-599-2902 or email sales@PartnerShip.com to learn more.
Click to read more...
Keys to Success for Vendor Compliance and Inbound Shipping
07/10/2018 — Leah Palnik
For many retailers, obtaining vendor compliance and maintaining smooth inbound shipping operations may seem like a tall order. However, with the right planning and follow through, it is achievable. By following these keys to success, you’ll be on your way to reducing your freight costs, avoiding chargeback issues, and creating efficient operations.
Developing an effective routing guide
The very foundation of achieving vendor compliance is developing an effective routing guide. Routing guides provide shipping instructions to your vendors that help you gain control of your inbound shipments. They often include modes and carriers for specific lanes, as well as rate and service requirements.
In order to create routings that are best for your business, you’ll need to consider several factors. Price, transit time, and reliability are all important when selecting a carrier and determining how to have your product shipped. For different services and weight breaks, you want to designate a carrier that provides you with the best rate and can deliver your product in the time you need.
Conducting an in-depth analysis of your inbound shipments can be time-consuming but necessary when determining your routing instructions. This is where working with the right freight broker can make a huge difference. The broker you work with should provide inbound management services that help determine the routings that will be best for your business and will create the routing guide for you – saving you valuable time.
Maintaining good relationships with your vendors
For smooth inbound shipping, you want to have a good rapport with your vendors. Like any other relationship, communication is key. For example, when you send your routing guide out to your vendors, it’s a good idea to include a request for confirmation. However, you won’t always receive one. If that’s the case, following up and opening the lines of communication will be your best bet to ensure vendor compliance.
If your vendors aren’t using your routing instructions after receiving your routing guide, you’ll need to follow up with a call or email. When you have a good relationship with your vendor, you’ll have the right point-of-contact and will be able to resolve the issue quickly. If not, you could have a harder time achieving vendor compliance.
Maintaining a relationship with your vendors can be difficult and time-consuming. This is another area where working with the right freight broker can make a difference. When selecting a freight broker, ask about experience in your industry. Quality freight brokers familiar with your industry will already have an established relationship with many of your vendors, which will help with compliance efforts.
Perfecting your order forecasting
Managing your inventory can be challenging. But the advantages of forecasting and planning your orders ahead of time are too great to ignore. When you don’t plan ahead and then need your product within a shorter time-frame, you will have to rely on costly expedited services. Spending the time up front to make sure your orders are placed with ample time will be better than spending the extra money in the long-run.
Also, with more lead time, you’ll be in a better position to handle any issues that arise. For example, if your shipment gets lost or damaged in transit and you need your product immediately, you’ll be out of luck. In that event, you’ll need to file a freight claim which doesn’t always guarantee compensation and is often a lengthy process.
If you’re not able to place your orders ahead of time, it’s a good idea to consider freight insurance. Unlike relying on carrier liability coverage, you won’t have to worry about if the carrier is found liable or not and often times you’ll get paid out much faster – making it easier to resume operations as normal.
Conducting regular reviews for improvements
Once you do have a routing guide in place and have vendor compliance, you can’t just set it and forget it. It’s best to review your routing instructions periodically so that you’re always getting the best rates and service possible.
You can choose to set aside a specific time each year to do a review. But if you make any changes throughout the year with your orders or any other factor that affects your shipments, you’ll want to take that time to evaluate and update if necessary.
It’s also important to stay on top of carrier rate increases, accessorial changes, and NMFC updates. These kinds of changes can have a significant effect on your freight costs and you'll want to make sure that you fully understand how these changes will affect your specific shipments. For example, carriers announce general rate increases every year and will present an average increase. If you simply use that average to judge how your costs will be affected, your budget will most likely be off. The increases vary greatly across the board depending on a number of characteristics, so it's important to evaluate them based on your specific shipments.
Partnering with the right freight broker
The keys to vendor compliance and inbound shipping management are easy to master when you work with the right freight partner. PartnerShip can help conduct a complete inbound shipping analysis, create a routing guide, and send routings on your behalf for vendor compliance. Contact us today to get started, or download our free white paper to learn more about managing your inbound shipments!
Click to read more...
Pallet Packing Mistakes to Avoid
06/27/2018 — Leah Palnik
Pallet packing isn’t something you can take lightly. One wrong move and the whole shipment could lose strength and stability – risking damage to your freight. Rather than conducting your own experiments, check out these common pallet packing mistakes so you know what to avoid.
Mistake #1: Choosing the wrong pallet
Pallet packing begins at the very foundation of your shipment – the pallet itself. It may be tempting to reuse old pallets for your shipments but if you’re not looking out for structural integrity, you could be in trouble. Avoid using pallets with broken boards or protruding nail heads.
Using an alternative material pallet can also cause some issues. Wooden pallets are the standard, but pallets made from metal, plastic, and corrugated materials have all entered the market. However, not all pallets are created equal. These pallets are good alternatives for certain specialized needs, but issues like weight, movement, and pallet strength make them not suitable for all types of freight. Before you consider swaying from wooden pallets, make sure to do your research.
Mistake #2: Not properly packing individual boxes
Before you can stack your pallet, you need to pack your individual boxes or cartons. Even if your boxes are secure on the pallet, the contents inside the cartons can shift. Leaving excess space and not providing proper impact protection is a common mistake that many shippers make. Start by right-sizing your boxes – leave just enough room for the product and the needed impact protection. Anything more is wasted space that you will need to fill with cushioning like paper pad or packing peanuts.
Mistake #3: Stacking inadequately
You may think that the way you stack your cartons is just about making it fit on your pallet. However, neglecting to follow certain best practices that increase strength can be a fatal mistake. During pallet packing, not evenly distributing weight and not placing the heaviest boxes at the bottom is a quick way to increase your risk of damage. Using pallets that are too small and thus leaving overhang is also a common mistake that will make your freight vulnerable.
The stacking patterns you use when packing your pallet are also extremely important. One of the biggest offenders is pyramid stacking. This kind of pallet packing pattern leaves the cartons at the top at greater risk of being damaged and makes the load less secure. When possible, an aligned column pattern is best. Stacking your pallet in a way that ensures it is level and flat will put you in the best position to avoid damage.
Mistake #4: Skimping on stretch wrap
If you don’t currently use a stretch wrap machine, you want to make sure your manual wrapping technique is up to par. There are a couple common mistakes to look out for. First, make sure you’re wrapping around the pallet enough. You should be making at least 5 wraps around the entire shipment. Second, twisting the wrap is something that is often overlooked. You should twist the wrap every other rotation to increase the durability.
Mistake #5: Not labeling correctly
After you go through all that work of ensuring you’ve packed your pallet in a way that reduces its risk of damage, you don’t want to run into issues just because you neglected to label your shipment properly. One label is not enough. You want to make sure the shipping label is on each side of your pallet, with the consignee information clearly visible.
Pallet packing may seem simple, but these missteps can create complicated issues. If you’ve discovered that you’ve made any of these common mistakes and want to learn more about packaging best practices, download our free white paper!
Click to read more...
It All Adds Up: The Operational Costs of Moving Freight
06/22/2018 — Jerry Spelic
Moving freight is getting more difficult, and therefore, more expensive. If you’ve ever had “sticker shock” from a freight quote, you’re not alone. There are a lot of cost factors that go into the price you pay to move freight, so we want to explain them so you can be an informed shipper and ship smarter.
Every LTL or truckload freight shipment has fixed and variable costs that are calculated into the rate you pay to ship your freight. Let’s start by looking at the fixed costs.
- Truck Payment. Owned or leased, drivers and operators have the expense of their equipment (trucks and trailers) to consider when quoting your freight. New trucks can be leased for $1,600 to $2,500 per month and used trucks can be leased for $800 -- $1,600 per month; a new truck can be purchased for $2,250 a month (purchase price of $125,000 with 5-year financing). On average, truck payments are 16% of the cost of moving freight.
- Insurance. The FMCSA requires individual owner-operators to carry a minimum of $750,000 to $5 million in liability coverage. On average, liability and damage insurance can cost between $6,000 – $8,000 per year, with newly-granted authorities typically paying between $10,000 and $16,000 their first year. Truck insurance accounts for 5% of the cost of freight shipping.
- Driver Salary. This is the largest operating cost of moving freight. Commercial truck driver salaries are based on the distance driven, and although drivers spend a lot of time in traffic, at the dock being loaded or unloaded, etc., their operating costs are only derived from miles traveled. With an average salary of $78,200, driver pay and benefits accounts for 43% of operational costs.
- Office and Overhead. This fixed cost includes a building lease or mortgage, and includes electric, phones, internet, computers, and office support. These costs can vary widely.
- Permits and Licenses. Permits and license plate costs account for $2,300 annually, or 1% of operational costs.
There are also many miscellaneous items that can factor into overall freight costs:
- Fuel. The second largest operating cost of moving freight is diesel fuel. A commercial truck can easily consume 20,000 gallons ($64,000) of diesel fuel per year, accounting for 21% of operational costs.
- Tires. Retreaded truck tires are less expensive than new tires and cost on average $250. Annual tire expense accounts for $3,600, which is roughly 2% of operational costs.
- Maintenance and Repairs. Trucks need constant maintenance and do occasionally break down. Issues with air lines and hoses, alternators, wiring, and brakes are all common in commercial trucks, and can cost $17,500 annually or 10% of operational costs.
- Meals. The truck isn’t the only part of LTL and truckload freight shipping that needs fuel! 10 meals a week at $12 each equals a meals expense of $6,500 a year.
- Tolls. With nearly 5,000 miles of toll roads in the US, chances are good that your freight will be traversing at least one of them, and this will be factored in your cost. For example, a load moving from Chicago to Baltimore will encounter toll roads in Illinois, Indiana, Ohio, and Pennsylvania, costing $225.75. Sometimes a carrier can avoid toll roads, but this will frequently increase the number of miles driven, which also increases your cost. On average, tolls add $2,500 a year, 2% of the total cost of freight shipping.
- Coffee. Did you know that truck stops sell more coffee than convenience stores? The average commercial truck driver spends more than $600 a year on coffee. Its effect on cost is negligible but we thought it was interesting!
- Profit. Remember, freight carriers are in business to make a profit. Owners, operators and drivers are funding their kids’ education or dance lessons, paying their mortgages, and buying food and necessities, so please don’t expect them to move your freight for free.
The bottom line is that a lot of factors go into the cost you pay for LTL or truckload freight shipping. The costs listed here are conservative and are probably on the low end, so your costs may be higher.
- Electronic Logging Devices (ELD), which have decreased driver productivity approximately 15%. When drivers spend less time driving, transit times increase and drivers move fewer loads, which pushes costs up.
- Telematics services, such as vehicle and trailer GPS tracking.
- Driver turnover; not just the cost of recruiting and training, but also the opportunity cost of empty trucks not hauling freight because they have no drivers.
- Finding loads to move can take up a sizable chunk of every day. Every hour spent not driving loaded miles is an hour a driver isn’t making money.
The struggle is real: moving freight is getting more difficult and more expensive. By shedding light on the costs that go into each and every LTL or truckload freight move, we hope that you’re better informed so you don’t experience “sticker shock” next time you get a freight quote. If you find yourself battling rising freight costs and need some help, contact the freight shipping experts at PartnerShip. We have significant experience in both the LTL and full truckload markets and can help you ship smarter so you can stay competitive.
Click to read more...
Factors Contributing to the 2018 LTL Rate Increases
06/19/2018 — Leah Palnik
LTL freight rate increases are unavoidable. And in this current tight capacity market, it’s no surprise that many carriers have taken their general rate increases (GRIs) earlier than in previous years. Just like in the truckload market, costs are been driven up by the ELD mandate, the driver shortage, and hours of service (HOS) rules. Coupled with the strong U.S. economy, freight demand is surging and straining the market.
Along with the tight capacity market, trends towards shorter supply chains and smaller, lighter loads have led to more demand for LTL services. The rise of ecommerce has played a large role in the increased demand. Products that consumers never would have dreamed of ordering online years ago, like furniture, have now become commonplace for ecommerce. However, these types of shipments are less desirable for carriers. With more deliveries being made to more remote areas without backhaul opportunities, the costs are significantly higher for them.
With the driver shortage, it is easier for carriers to find and recruit LTL drivers, compared to truckload. They are more appealing jobs, with shorter lengths of hauls and less time away from home and families. However, there are fewer LTL carriers entering the market when compared to truckload. The complex networks of terminals that LTL carriers rely on are much more difficult to establish, making it a significant barrier to entry.
With all of those factors to contend with, LTL carriers have been announcing their GRIs throughout the first half of 2018.
- FedEx Freight: 4.9% effective January 1
- YRC Freight: 5.9% effective February 19
- XPO: 5.9% effective March 5
- UPS Freight: 5.9% effective March 26
- ABF: 5.9% effective April 16
- Estes: 5.9% effective May 7
- Old Dominion: 4.9% effective June 4
Rates aren’t the only thing on the rise. Many carriers are charging more for accessorials like inside delivery or Saturday delivery. Carriers are also implementing tools and technology that help them determine what types of freight are profitable and which ones aren’t – and charging accordingly. Dimensional pricing is one example of this. Many carriers have invested in dimensioning machines, which calculate the amount of space a shipment will need in the truck, leading to less dependency on the National Motor Freight Classification (NMFC) system.
As with any announced rate increases, the important thing to remember is that the averages may not reflect the actual increases you’ll see in your freight bills. Depending on the lane and shipment characteristics like weight or class, the increase could be significantly more.
To determine what you can expect and what you can do to offset the rising costs, start by taking a look at the increases for your typical lanes. That will give you a better idea of what cost increases you can budget for, rather than relying solely on the reported averages. Then determine ways to reduce those costs. Consider working with a freight broker, to benefit from their industry expertise. A quality broker will have the knowledge to help you navigate the market and will be able to find solutions that can help to reduce your costs.
PartnerShip can help you ship smarter. For a competitive rate on your next LTL shipment, get a free quote!
Click to read more...
Your Guide to Proper Packaging
05/30/2018 — Leah PalnikProper packaging is a critical step in the shipping process. Just one mistake can expose your shipment to costly and time-consuming damages. Not only do you need to use quality materials, but you also need to package your products in a way that will increase strength and durability. Packaging is not a one-size-fits-all game, but it does start with some basic best practices.
Small Package Shipments
When picking a box for your products, you want one that is in good condition (no holes, rips, or dents) and is sized just right. There should be just enough space for the needed cushioning and no more. If you use a box that is excessively large you run the risk of being charged according to your dimensional (DIM) weight, which can get quite pricey.
How you cushion your contents will depend on the product you’re shipping. In general, you can protect the contents of your package with bubble wrap, foam cushioning, paper pad, or packing peanuts. This will help to prevent damages caused by movement and vibration that occur during transit.
Then it’s time to seal and label your package. Use packing tape rather than duct tape or masking tape, and seal your box using the H taping method. Remove any old labels from the box and place your label on the largest surface. Labeling is an important step for proper packaging, because it helps get your shipment to the right place without any unnecessary delays.
When deciding how to package your freight, consider the size and weight of your shipment and how it will be handled. What kind of protection will it need? Will it be on a dedicated truck or will it be moved on multiple vehicles?
Palletizing your freight will give it a solid base and will make movement on and off the truck easy and safe, making it a good choice for many different types of loads. Wooden pallets are the most common, and are typically recommended by carriers like FedEx and UPS Freight. However, you may consider metal, plastic, or corrugated pallets depending on what you’re shipping.
For the cartons on your pallets, make sure the contents inside are packaged properly with the needed impact protection and each carton is labeled with the shipper and consignee information. While stacking, you need to consider how it will affect the strength of your shipment. Start by placing heavier cartons on the bottom with lighter boxes at the top, and distribute the weight evenly. Use an aligned, column pattern while stacking and make sure there is no overhang.
Once your pallet is stacked, you’ll want to secure it with stretch-wrap and banding. The stretch-wrap should go around the cartons several times and be twisted every other rotation for increased durability. For banding, use sturdy steel, rayon, polypropylene, nylon, or polyester straps.
You may also want to consider crating if you’re shipping fragile freight. First, select a crate that is constructed from quality lumber. Most carriers will recommend plywood rather than oriented strand board (OSB), medium-density fiberboard (MDF), or particleboard. You also want to make sure your crate is sized appropriately, with excess space kept to a minimum.
Proper Packaging Is Key
Avoiding damaged freight and a claims nightmare starts with proper packaging. Along the way, you’ll also save yourself from costly DIM weight charges and increase the durability of your shipments. The time you spend up front to make sure you have proper packaging will be well worth it. Get in-depth instructions by downloading our free white paper – The Ultimate Guide to Packaging Your Shipments!
Click to read more...
High Freight Rates and Tight Capacity: What You Can Expect
01/22/2018 — Leah Palnik
If you’ve been experiencing sticker shock from unpredictable freight rates lately, you’re not alone. Shippers are seeing a lot of volatility in the truckload and LTL market, with no end in sight.
2017 ended with tightened capacity and record rates. By December, the average van rate was $2.11 per mile (DAT) – an all time high. The load-to-truck ratio was also breaking records at the end of the year, with 9 load postings for every truck posting in December.
Coming off of a record high December, capacity continues to be tight in January – particularly with reefers since they’re needed to keep freight from freezing in the coldest parts of the country. DAT reported that the national load-to-truck ratio at the beginning of the year was the highest ever recorded at 25.2 reefer loads per truck. During which, the reefer rate was at a high $2.71/mile. Van rates have also been breaking records. According to DAT, they were at $2.30/mile on January 6.
So what can shippers expect going forward? Let’s look at the trends. We saw a bit of a recession in 2015 and 2016 with rates and load-to-truck ratios declining, but that appears to be over. Rates climbed throughout 2017 and we can continue to expect increases in 2018.
Overall, the U.S. economy is healthy right now and is growing, increasing freight demand. In contrast, the trucking industry is dealing with the aftermath of the ELD (electronic logging devices) mandate. Not only do they need more drivers and more equipment on the road to handle the same amount of freight, but they are also contending with a long running driver shortage. All of this equals tightened capacity, which is becoming the new normal in the industry.
Recent weather events have been driving up rates as well. Areas of the U.S. that don’t typically experience extreme cold or snow have been hit by treacherous weather that has led to dangerous conditions including low visibility and icy roads. In a tight capacity market, these conditions drive up rates even more.
In February we can expect to see capacity loosen some (barring any winter storms or other troublesome events), as this is typically the slowest time of year for freight. However, you’re likely to see higher rates than you have in years past, because of the long-term trends.
In April, drivers not complying with the ELD mandate will be put out of service. Up until then, inspectors and roadside enforcement personnel are simply documenting and issuing citations if a truck isn’t equipped with the required device. As a result, we may see some ripple effects. There could be fleets that have held out or hoped to fly under the radar until April. There could also be another wave of trucking companies exiting the market, which will leave a void in the already tight market.
Now it’s more important than ever to find ways to mitigate the impact of this tightened capacity. Plan ahead so you can be flexible. Providing more lead time and giving your carrier a longer pickup window rather than a specific time can lessen the strain on its network. Planning ahead can also help you shift to more committed freight and away from the spot market. The spot market is more sensitive to disruptions and subject to reactionary pricing spikes.
Luckily you don’t have to navigate the freight market alone. When you work with PartnerShip, you benefit from our large network of carrier partners and our shipping expertise. We help you ship smarter with competitive rates and reliable service. Get a quote today!
Click to read more...
Need It Yesterday? A Guide to Time-Critical Shipping
11/27/2017 — Jen Deming
Holiday fulfillment and expedited freight deadlines are as much a part of the holiday season as cookies, cocoa, and hasty gift wrapping. Shipping managers are very much like the St. Nick of logistics, making sure every order is out—and delivered—on time and accurately to every customer. Between weather delays, unexpected inventory depletion, and rush order fulfillment, planning your winter shipping strategy is a crucial part of your holiday preparation. By being mindful of carrier schedules and deadlines, subsequent holiday surcharges, and familiarizing yourself with time-critical options, you will know which services best fit you and your customers’ needs.
Sometimes, despite how prepared we think we are, a deadline catches up to us and standard shipping services just are not going to cut it. It’s important to understand the differences between shipping services offered, so that you can make informed decisions that meet your needs while not stretching your budget. Let’s take a look at whether your organization may benefit from time-critical shipping services during a heavy shipping season, and which services may make the most sense for your business.
There are certain industries that may require expedited freight services more often, and on a more regular basis, not only during the holiday heavy season. Common industries using expedited services include medical, pharmaceutical, manufacturing, and particularly the automobile industry. It's crucial to understand that during the holiday season, there are going to be additional shippers using both standard and special expedited freight services due to time constraints, further congesting shipping lanes and significantly decreasing carrier capacity.
Most carriers offer tiered services based on window of delivery, transit time, and dedicated truck type. We will look at the 4 most common types of special services for your urgent holiday shipments: guaranteed, accelerated, time-critical (one-day, two-day), and dedicated truckload. Let's use a freight shipment example, a one-pallet 500 lb load moving from popular shipping hub, Chicago, IL (60638) to delivery in San Francisco, CA (94107). For the purpose of this example, we will assume standard 8am-5pm shipping hours, regular, non-oversized shipment dimensions, and non hazardous materials. Typical transit time for this standard LTL service with most carriers is 5 full business days.
Guaranteed LTL shipping services are great for those shippers who may not necessarily need to shave a day or two off of transit time, but definitely need a pre-determined delivery within a certain window during a standard service day. This fee-based service is available on direct-point shipments and can be tailored to either guaranteed morning (before 12pm) or "end of day" (typically 5pm) for delivery. The fee for guaranteed service is minimal and very commonly used, especially during holiday times for retailers
Accelerated LTL shipping services are suited for shippers who are looking for a faster standard shipping option. Accelerated shipping options fit between standard and time-critical premium services, typically cutting one or two days off of typical transit. The average price for the faster service is about 15% higher than standard LTL services, but differ based on the distance and type of shipments.
Time-critical and expedited freight options are premium services offered by national carriers, specifically created to meet stringent delivery deadlines as determined by the shipper. An expedited shipment typically travels directly from pick-up to delivery, with no loading or unloading at terminals and often with dedicated equipment. Teams of drivers often haul in shifts in order to decrease transit times. In especially urgent situations, multiple modes of transit may be used, such as a combination of truck and air freight. Common urgent delivery services include same day, next day, and cross-town deliveries and while there is no limit on distance, the more extreme the request, the higher the shipper will pay.
For a clearer picture of delivery timelines through various urgent services, we've created the table below:
Expedited Freight Service
Pick-Up and Delivery Timeline
Pick-up Mon, 12/4 = Delivery Fri, 12/8 by noon
Pick-up Mon, 12/4 = Delivery Thurs, 12/7
Pick-up Mon, 12/4 = Delivery by YOUR specified deadline
Though urgent services are often viewed as "problem-solving" freight solutions in emergency scenarios, more and more shippers are using planned time-critical options as part of their holiday shipping strategy. Just-in-time manufacturers also utilize these services in order to fulfill and meet demand. Though these expedited freight services may come with a higher price tag, oftentimes the cost is offset by reducing inventory costs. An extra benefit to using these services is the added safety and security of the shipment, due to decreased reloading and an escalated level of tracking.
Even despite solid holiday planning and logistic strategies, shippers may encounter scenarios that require guaranteed or urgent shipping services. If you're not sure which time-critical LTL shipping services are right for your shipment, our shipping experts can find solutions that make the most sense for your business and your wallet. Get a free expedited freight quote today!
Click to read more...
LTL vs. Truckload Freight. What’s the Difference?
08/16/2017 — Jerry Spelic
Less-than-truckload (LTL) and truckload freight shipping may appear to be similar but they are two very different shipping services. Many shippers exclusively use one or the other, but they can be used together. To help you ship smarter, here are the four main differences between LTL and truckload shipping.
Transit time and handling
LTL: LTL shipping combines shipments from multiple customers so your freight isn’t the only freight on the truck; it shares space (and cost) with other company’s freight and will make multiple stops at terminals between the shipper and consignee. For example, the freight you are shipping from Cleveland to Houston may make stops in Indianapolis, Nashville and Dallas before reaching its final destination. At each stop, your freight is unloaded and reloaded and must wait for the next truck, increasing transit time and handling, and the possibility of damage.
Truckload: When you ship full truckload, your freight is the only thing on the truck. The carrier will make a pickup at the origin and drive straight to the destination. Aside from driver rest breaks, fuel and equipment issues, the truck doesn't stop, resulting in much faster transit times. In addition, your freight never leaves the truck, resulting in much less handling and fewer opportunities to be damaged.
Weight and shipment size
LTL: Less-than-truckload shipments are typically between one and six pallets and weight from 200 to 5,000 pounds. LTL freight usually takes up less then 12 linear feet of the trailer, and since the typical pallet measures 40” x 48”, 6 pallets arranged side-by-side would take up exactly 12’ of linear space on each side of the trailer.
Truckload: A full truckload shipment can range from 24 to 30 pallets and up. With truckload freight, the space your shipment takes up in the trailer has more of an impact than weight, so truckload shipments commonly range from 5,000 pounds to 45,000 pounds and up.
LTL: The most significant difference between LTL and truckload shipping is pricing. LTL freight pricing is regulated by the National Motor Freight Traffic Association (NMFTA) which is a nonprofit membership organization made up primarily of interstate motor carriers. It classifies all freight based on its commodity, density, and ease of transport. LTL carriers each have standard LTL rates which are determined by your origin and destination, your freight’s NMFC class, the amount of space it occupies on the truck, and any accessorials you require. All of these variables are factored into the LTL rate you pay.
Truckload: Truckload freight pricing is completely dependent upon the market. With no pre-established rates, truckload freight negotiations happen as needed over the phone or through email. Truckload rates fluctuate, sometimes by the week, day or even by the hour. Factors that drive pricing include the origin and destination, weight of the shipment, seasons (such as harvest season or even back-to-school season), truck capacity and location, the shipping lane or route, and fuel and operating costs. Typically, there are no contracts with truckload carriers, which can vary from an owner/operator with one truck to huge truckload shipping companies with thousands of trucks in their fleet.
LTL: Refrigerated LTL shipments are a bit more difficult to find and secure than dry van LTL shipments. Most reefer LTL carriers have schedules that are determined by lanes and temperatures. As an example, an LTL reefer carrier might pick up in southern California on Wednesday and may run at 45 degrees with a set delivery route and schedule. This can make finding an available reefer LTL carrier difficult, especially for one-off shipments or on short notice.
Truckload: Reefer trailers are common and readily available. Reefer trailers can range from below zero to seventy degrees, and since only your freight is on the trailer, the shipment can move on whatever schedule and temperature you need it to. Aside from the temperature control and being a bit more expensive, refrigerated truckload shipments aren’t much different from dry truckload shipments.
PartnerShip is an expert at providing you the best rates on both LTL and truckload freight shipping so you can stay competitive. Contact our shipping experts at 800-599-2902 or email sales@PartnerShip.com whenever you need to ship smarter.
Get a free quote on your next LTL freight shipment or truckload freight shipment!
Click to read more...
What You Need to Know About Freight Class Changes
08/10/2017 — Jen Deming