Shippers are up against serious challenges in 2018. Numerous factors are combining to make it difficult for manufacturers and retailers alike to achieve the increased volume, speed and accuracy demanded by our booming economy. Put simply, constrained capacity has turned transportation – specifically trucking, which moves about 70 percent of freight – into a pain point for many shippers. It's a story we’ve heard before, but this time it's worse than ever.
In this landscape inaction is not an option. Shippers cannot afford to ignore the reality of the situation: Even with easing in certain areas, the main drivers creating the situation will remain. Forecasts suggest that capacity will continue to be an issue for shippers for the foreseeable future, or at least the next couple of years.
There's not going to be a magic bullet to solve this capacity crunch. But there are steps shippers can take to alleviate the pain and reduce the cost. These solutions fall into broad categories: saving time, better planning, and becoming a more desirable business partner.
Alone, none of these ideas will eliminate the effects of reduced capacity. But employed together in a way that suits your business, a combination of these practical suggestions can reduce your bottom line suffering. It will take some serious work to analyze where you can best employ new strategies and techniques, but this process of improvement – leveling up – will net the results you need to not just survive but thrive.
A recent post from Logistics Management magazine sums it up: "Shippers need to get smarter about how they’re managing their current carrier relationships; how they’re optimizing routes and capacity; and they need to start putting data to work to plan in advance of any predictable disruptions—be it seasonable peaks or inclement weather."[1]
Making time
Time is a finite resource, but it can be stretched. Your objective is to stretch the driver's time on the road by compressing the amount he spends at your facility. Reduce dwell times will not only speed up your operations, it will make the trucker's life easier and more efficient, and will help you become a shipper of choice as well.
Reducing driver dwell time will have a huge impact on operational productivity. In our recent White Paper on Surviving the Driver Shortage Crisis we cited a J.B. Hunt study which points out that by reducing pickup and drop-off times by 30 minutes each a driver can save two hours a day in productive time. "In the context of the US HoS regulations, during a 14-hour (840-minute) day, a driver may be behind the wheel a maximum of 660 minutes per day. Then there is a 30-minute break requirement, leaving 150 minutes of on-duty, non-driving time for things like picking up and unloading cargo, doing paperwork and safety inspections."[2]
A report by the U.S. Office of the Inspector General (OIG) found that detention is associated with reductions in annual earnings of $1.1 billion to $1.3 billion for for-hire commercial motor vehicle drivers in the truckload sector. For motor carriers in that sector, they estimated that detention reduces net income by $250.6 million to $302.9 million annually.
Reducing detention time also provides safety benefits, as drivers who experience long delays are prone to driving in an unsafe manner to try to regain lost productivity. The OIG study also found that 15-minute extra dwell time increases the average expected crash rate by 6.2 percent, which would amount to an additional 6,509 crashes a year.[3]
Scheduling dock appointments is one way to save time. Keeping to that schedule is another. Eliminating haphazard 'first-come, first-served' dock scheduling will make life a lot more pleasant for all involved and will reduce or eliminate waiting. Managing your yard so that drop and hook programs are organized and work properly is another. If the exact location of a trailer is known the time wasted hunting for it can be used by the driver to make deliveries, instead of sitting around getting frustrated.
Fortunately, excellent technology exists to make these operations simple and streamlined for you and the drivers. And it doesn't have to be complicated. Cloud-based yard management and dock scheduling solutions can be implemented quickly, with low up-front costs. As well, the benefits they confer go not only to improving trucker productivity, they also streamline your operations – a double win.
Better planning
With dock scheduling and yard management in play, you have to become a better planner. That means better coordination with production, sales and marketing departments in your own operations to allow loads to be built or received on schedule.
With that information in hand you'll be able to plan labor requirements so that the correct number of staff are on hand when they are needed. The days of dock staff waiting around for late loads to arrive should be over, allowing some relief in your labor budgets as well.
Better planning can also help you reduce your total number of outbound loads. Consolidating product into one load that would previously have required two will net big savings, especially if this planning can be made a regular part of your operational schedule not just a one-off solution.
A further benefit of predictability is that allowing your carrier partners to plan according to a set schedule will net you lower freight rates and tick a few more boxes on the shipper of choice checklist.[4] In the current environment, with certain lanes experiencing more capacity shortfall than others, better planning may also allow the carrier to use alternate routing, and thus cut you a better deal.
Be a better partner
While both planning and scheduling will curry favor with your carrier partners there are numerous other actions, both large and small, that will make you a more favored shipper. We detailed how to achieve Shipper of Choice status in our White Paper, which you can read here [link], but here's a quick list of the key takeaways:
- Maintain good relationships. Complaining about the market, hammering on rates, and being intermittent and vague are all good ways to make carriers bypass your company. Be understanding of the market and schedule regular meetings to discuss how things are going.
- Be a good corporate citizen. Pay bills on time, or early. It matters when you are competing for carriers.
- Be predictable. This is where the planning noted above comes in. Smooth out the peaks and valleys in your demand for transportation.
- Plan. Be predictable with loads. Schedule dock appointments.
- Treat drivers like kings. Don't just make and keep appointments. Give the drivers an inviting and useful place to hang out when they have to. If that means free food, showers or Wi-Fi, do it. Their employers will hear the good feedback and look kindly on you.
- Respect the driver's time.
- Be compliant with regulations. From Hours of Service to Chain of Responsibility, to food safety and beyond, you'll get better results from your trucking partners if you are in compliance with regulations that affect everyone on the supply chain.
- Use technology. From the YMS and dock scheduling apps, to transportation management, inventory control and electronic data interchange software, the range of services available to increase productivity is already vast and growing. The data is there – learn how to leverage it.
[1] 2018 Outlook: Rates up, capacity tight—time to get smarter
[2] C3 Solutions, "Becoming a Shipper of Choice"
[3] https://www.oig.dot.gov/library-item/36237
[4] C3 Solutions, "Becoming a Shipper of Choice".