Consumer Goods Logistics Blog

Freight rates fluctuate. Always have. Always will.

Large-volume shippers in search of the cheapest rate monitor spot market freight rates closely. When prices dip, freight procurement people rev up the RFP machine and shop out lanes to capitalize on the savings.

But, actually, these “savings” may end up costing shippers more in the long run. And what’s happening now is a perfect example.

We’ve seen no negative impact on KANE customers’ freight during COVID-19 – a great accomplishment that has required a spirited effort by our transportation team. Here are some of the issues we’ve had to face.

On February 11, the Pennsylvania Department of Transportation (PennDOT) announced plans for a commercial vehicle ban on all major highways in Eastern Pennsylvania in anticipation of a predicted snow-ice mix the following day.   Thankfully, the severity of the storm fell short of predictions and roads remained safely drivable for the duration of the weather event.

But by the time DOT administrators caught up with Mother Nature’s exact plans, it was too late for trucking companies to avoid major financial losses related to pulling trucks off the road.

2018 was a tough year for both shippers and carriers as constrained capacity led to delayed shipments and higher freight prices. Q1 2019 has started like many Q1s have in years past, with a softening of the truck market. 

While things are shifting for the better, don’t be fooled.  The capacity crunch is not behind us. But this slight grace period does provide shippers a golden opportunity to build and strengthen relationships with a select group of strategic carriers.  Cementing these carrier relationships will ensure that you have reliable capacity at locked-in rates when the market inevitably shifts back.

You may have read or possibly heard people talking about the 8 types of waste.  It's one of the core competencies of Lean Six Sigma programs and is a useful roadmap for all industries in finding savings opportunities, regardless if they practice Lean Six Sigma or not. 

When carriers are able to reduce empty miles, the shipper wins. A carrier carting around an empty trailer continues to incur expenses for every mile it runs, such as driver pay, benefits, fuel, fuel tax, tolls, and maintenance. With no revenue for the empty move, the carrier is forced to add those costs onto the deliveries a shipper tenders. Seems unfair somehow, doesn’t it?

As inflation continues to drag down earnings and increase costs for U.S. businesses, companies are taking a hard look at their transportation spend and how they can reduce freight shipping costs.  Here are eight simple strategies to consider. 

Here at KANE, we are big proponents of freight consolidation. So big that, when we thought of writing about possible barriers to consolidation in this week’s blog, we were worried that it might be too quick a read: “There are no barriers to working with freight consolidation services companies. Thank you for reading.” 

All kidding aside, we can think of a few companies for whom freight consolidation might not be a good fit. Read on to see if you’re one of them.