Due to the high demand for shipping space and inflationary trends, there is a noticeable increase in transportation rates across the LTL industry.
Caught between a driver shortage, high fuel costs, and high demand for shipping capacity, rates associated with LTL shipping have climbed steadily so far in 2022.
However, there are ways to mitigate the impact of these increases on your LTL rates in 2022, such as outsourcing LTL freight management, adjusting delivery schedules, and reducing extra weight in shipments.
Outsource LTL Freight Management
As complexity increases, more LTL shippers are outsourcing their LTL freight management. In fact, according to Grand View Research, the U.S. supply chain management market is expected to expand at almost 11% CAGR, the highest of any procurement segment and an indicator that outsourcing is expected to continue accelerating. Accordingly, LTL shippers can expect to see greater savings, which is a major reason for the trend.
Rather than price shopping on your own and defaulting to the lowest price, potentially at the expense of service or falling prey to hidden costs, an outsourced LTL freight management solution can look at the whole picture and provide greater savings, while saving time for shippers.
Use Less Dunnage
Dunnage refers to loose packing material to keep products safe during transit. These packing materials include wooden blocks, dunnage bags, styrofoam peanuts, etc.
Dunnage protects items in transit, however, too much of it occupies valuable space better utilized for other packages. When there is the potential to leverage tighter fits versus filling gaps with items that contribute to waste issues, take the route that allows you to ship more goods per shipment while simultaneously helping to reduce waste.
This idea extends beyond general dunnage such as airbags and wooden blocks. It is applicable to the dimensions of shipping boxes and pallets as well. Smaller boxes along with shorter width pallets ensure the space allocated for your goods is used efficiently.
Implement Off-Hours Scheduling To Stay On-Target
Implementing off-hour or nighttime deliveries opens the potential for up to 30% cost reduction. This is achieved by giving carriers more flexibility in regards to moving loads through their system.
A simple adjustment to lead time calculation and changing to off-hour delivery times helps mitigate the projected double-digit increase. Changing the receiving process in this manner may take some time to adjust to, but it is an important step in mitigating the projected double-digit rise in shipping costs.
Building A Solid Foundation
We have all weathered the current storm as well as possible. However, the ripples continue to impact global and national supply chains continuing into the second half of 2022.
Most analysts are predicting that quarters 3 and 4 will see a leveling out. Their predictions even include a slight drop in shipping prices. This drop is expected as the production of new trucks and trailers catches up to backlogs, newly trained drivers enter the workforce, and retailer inventories nationwide re-stabilize.
By implementing the suggestions we have covered here, mitigation of the rising LTL rates is achievable. Keep in mind that these tips aren't instant success secrets. They are a set of best practices for laying a solid foundation in preparation for a potentially turbulent year.