The National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center is predicting another above-normal Atlantic hurricane season. Forecasters predict a 60% chance of an above-normal season, a 30% chance of a near-normal season, and a 10% chance of a below-normal season. However, experts do not anticipate the historic level of storm activity seen in 2020.
If you’ve seen higher than expected freight rates, we hear you, we see you. There’s a couple of potential factors for these increases. Since Q2 of 2020, the freight markets have shown robust growth, which has raised rates dramatically. While this is good news for carriers and manufacturers, it has caused CPG shippers to pay the price in rising freight rates. In this week’s blog, our team analyzes the various factors that are driving up freight rates and why they are happening.
Factor 1 | Port Congestion
With pandemic-related consumer shopping habits, many West Coast ports operated at maximum capacity during the summer. In 2021, the uptick in imports has compounded the situation and caused even more congestion. March retail sales increased by 9.8% sequentially and 14.3% year-over-year. A 27.7% jump led to an increase in sales of food services. With more imports on board, shippers should brace for capacity constraints. As the produce season gets underway, rates will also rise.
Factor 2 | Produce Season
The start of the produce season typically occurs in February in the southern US. By spring/summertime, it has reached the majority of the US. During this time, capacity is tightened as refrigerated carriers dedicate a lot of their space to hauling produce. Other products that can ship via dry van or on refrigerated trucks will move to van transport, thus increasing freight rates across the board.
Factor 3 | Reliance on Split Shipments
eCommerce brands have been comprehensively using split shipments for years. Firstly goods need to be picked from inventories across different locations. With not enough room on a single truck or plane for an entire shipment, it may have to be divided into individual boxes and delivered individually. Split shipments happen to occur even more often during cross-country or international shipment of goods. The more the shipments, the costlier the shipping costs; therefore, the trend ends up being a pricey affair and often harmful to the shipping ecosystem.
Counter Rising Rates with these Techniques:
One of the most effective ways to combat these high freight rates is planning shipments far in advance. Cargo cost is increasing every day. To avoid paying surged charges and avail early bird facilities, companies have to plan their shipments well in advance strategically. Working with a team of transportation experts (Like Taylor) that uses digital platforms to leverage data on the freight costs to predict rates and trends affecting the rates will help to plan and lower costs.
Work With A Team Of Experts
Work with a dedicated logistics team to ensure conditions do not endanger profitability. Teaming up with a partner like Taylor can help your organization correctly forecast costs and find more favorable pricing through consolidation or mode optimization services.
Have you ever had issues with port congestion or total transit time and cost issues for international freight? Taylor Logistics has a specific team that specializes in services with the New Jersey/New York Ports.
New-age technologies have widened the scope of transportation. Some features will allow you to access to driving and travel analytics. As a result, you will adjust your business according to the recent trends in the market. Today, we live in a world that is digitally connected. The trucking industry is also working hard to create that perfect network. Here are ways to ensure your fleet is connected.
Putting mobile technology into the hands of drivers can help managers collect real-time data around arrival/departure times, wait times, loading/unloading times, fuel stops, and more. These real-time metrics help managers work smarter, providing the critical insights they need to make informed decisions around pricing, generate increased revenues, and better manage the bottom line. Mobile also helps to enhance employee experiences by enabling people to take control of their schedules. Using employee self-service features, drivers should be able to tap their mobile device to request a vacation day, anywhere at any time, and they know with confidence that their request was received and processed by a manager.
Data, Data, Data!
Analyzing data while on the go enables managers to identify trends, drive better business outcomes, and eliminate possible waisted time. If a driver isn’t on the move, that truck isn’t earning revenue. So, look at drivers’ wait times – are they longer than expected? A manager may find that a particular yard wasn’t ready for a truck when it arrived, and this left the driver waiting longer than expected before unloading could begin.
There have been several advancements made throughout the trucking industry that have positively impacted the well-being and safety of truck drivers. It will be fascinating to see what new innovative technology emerges in the coming months to continue to shape the industry.
Flatbed trucking is an integral piece of the supply chain frequently used for carrying oversized or oddly shaped loads but has a wide variety of uses making it very versatile and valuable. Flatbeds are designed not only for providing an unconfined space for freight but are also makes loading and unloading of goods much more uncomplicated. Read about all the practical reasons to use flatbed trucking.
Use Flatbed Trucking for Variety of Materials
When transporting a high volume of material on a single trip, the flatbed can accommodate various types of cargo equipment with different dimensions. This dimensional flexibility allows for cargo of any shape or size.
Ease of Loading and Offloading
Flatbed trailers are open with no confined walls making it more accessible to load from all directions. Loading is exceptionally efficient, with a forklift from the ground rather than having to dock for loading. This trailer can carry bigger and wider loads than confined trailers.
No Loading Dock
Vans are the most popular mode of transportation of cargo; however, they have a limitation as they need access to a loading dock for loading and unloading. With flatbed trucking, you will not be restricted to a dock as it’s able to deliver cargo in virtually any open location. This flexibility is appealing to lumber shippers and contractors.
Flatbed rates are determined based on a variety of market factors. The area where the freight is transported to and from, diesel prices, the weight, and dimensions, as well as the number of available trucks, all have a role in determining the flatbed rate.
Let Us Help
Within the scope of Taylor’s service portfolio, we offer Freight Brokerage services through our expert team of dispatchers and maintain relationships with a network of screened, dependable carriers allowing us to expand our customer service reach to the entire United States. We service 100% of freight lanes, providing our customers with a one-stop-shop for all supply chain services.
If you are knowledgeable about the freight you are shipping, understand the options available, and select the right people to work with, your shipping efforts will not only go smoother, but you will also save valuable time and a lot of money. Not sure where to begin? Reach out to us at Taylor Logistics and let us show you what we can do for you today!