Hot Take
Earlier this week we talked about how a strong carrier network is key to getting through the tight spot market and delivering your promises to the customer. The trick lies in creating and developing that carrier network. Shockingly the best way to move shippers’ freight isn’t always just posting everything on the load board and hoping for Prince Charming to come in and save the day. In a perfect world, you would only have to use a load board once a week to find some carriers for a new lane.
Load board rates run higher than what your customer wants to pay. Carriers have to deadhead from potentially 150-plus miles away to get to that load. If you can get a consistent shipping schedule out of your shipper (four loads a week every week versus 30 loads in the last week of the month), you can start to give the carriers a consistent schedule of when to expect loads out of that facility. That in turn gives them the reliability they need and means you can get the rates down below what the customer is willing to pay and you can see your margin rates increase as well.
Some people have different load board tricks. I say experiment and find what works for the market you’re looking for. A carrier is going to look at what is posted for the market its delivery is in; however, that delivery might not happen till 3 p.m., meaning they’re not checking the board till then, instead of at 8 a.m. when you post the load. If you’re trying to find a new carrier for a new lane, try posting the load on different days, times, etc. to maximize the amount of people that could call you back with interest.
If the load doesn’t work this time, ask those probing questions you’d ask a potential new customer. What areas do you find yourself in a lot? Where is your home base? How often are you looking to get home? Keep that information in a commonly shared place so you don’t have everyone in the office calling the same carriers and drivers asking the same questions. It’s a giant book of carriers waiting to be used. You never know when some detail about Johnny trying to get home to Lincoln, Nebraska, on Thursday nights might be the thing that gets your load covered and makes you not have to roll a pickup a day.
Quick Hit
When starting out with a smaller brokerage or 3PL, you have to wear many hats. That’s the nature of a small business — it’s small so everyone ends up doing odd jobs here and there. Marketing is one of those things that is kind of haphazard for some new brokerages. They might get someone to create a website and have someone for some social media posts and generating content, but when it comes to putting everyone in roles that play to their strengths, that’s a whole other ball game.
You could find that your marketing manager is really good at creating content, but the data analytics of how successful a campaign was might be something he or she struggles with. It’s the same with parsing out data — it’s not for everyone because there is no set way data is collected and stored so it takes a while to find something. Then that leads to: “Well, if I hire someone to do this one task, then what will they do after that?” Freelance workers are perfect for that.
If you have a project you want done but don’t want to hire a W-2-style employee or bother with a temporary hire, there are freelancers who are so specific and niche that 100% someone will have the skill set you’re on the hunt for. To build a strong company you have to have people in positions that play to their strengths. Every once in a while it’s worth taking a step back and making sure everyone is playing to their strengths for an overall combined success.
High unemployment rates are about to be a thing of the past-ish. Due to the *ahem* complications last year within just about every industry’s supply chain, 83% of manufacturers surveyed said they were likely or extremely likely to reshore manufacturing facilities. The cost of shipping a standard container from Asia to the U.S. West Coast was as high as $20,000 in September 2021. The cost of shipping a truckload from Mexico to the U.S. varies based on commodity but ranges from $1,600 to $1,800 a shipment.
The risk of interruptions in the supply chain for inter-North America is much lower compared to that of Asia to the U.S. Lower cost and lower interruptions to the supply chain mean manufacturers have more product available and can ensure nothing runs out. The cost of moving facilities back to the U.S. is high but could inject $443 billion into the U.S. economy, meaning the logistics and brokerage world could continue to see record years and high volumes for a while.
TRAC Thursday
We have Johnny from our previous example unloaded in Laredo, Texas. He lives in Lincoln, Nebraska. Well, if I’ve got a load from Laredo delivering to Omaha Thursday afternoon, it looks like Johnny is my first call. The all-in rate now is about $3271.52 or $3.22 per mile. I’d say it might be an option to talk to Johnny and see if he’d come down on his rate at all since it’s sending him home on Thursdays, which as we learned before is his main goal every week.
Not only have you leveraged your carrier network but knowing your carriers and having good notes means you’re more prepared for a strong negotiation.
Who’s with Who
Titanium Transportation acquired Canadian carrier Bert and Son’s in an effort to expand its Canadian footprint. This acquisition will consolidate Titanium’s Brantford, Ontario, office into the former Bert and Son’s headquarters. In February 2021, Titanium acquired International Truckload Services, quickly growing its footprint and continuing plans to grow the cross-border business with its U.S. brokerage offices.
Lineage Logistics LLC received $1.7 billion in equity for a total of $6 billion raised over the last two years. Lineage is the world’s largest cold storage industrial real estate investment trust. Seeing as logistics warehousing demand is already a hot market, Lineage has set itself up for a record year with this additional round of funding that will help with new construction and IT projects.