As the trucking industry continues to slog through its toughest downturn since the 2008 financial crisis, analysts have pointed out a slow shift in market trends. Hard-hit carriers have been buoyed by these glimmers of hope in recent months, but the timing of a true market upswing remains difficult to pin down.
This much-anticipated market shift is likely inevitable, although its timing and shape is still unclear.
Some experts expected to see a significant rate jump by the fourth quarter of 2023, but high-frequency data housed in FreightWaves SONAR paints a different picture. In a recent article, FreightWaves CEO Craig Fuller pointed to SONAR’s Carrier Details Total Trucking Authorities index to shed some light on the ongoing freight recession.
In short, Fuller found that — if the current rate of trucking company closures continues — it will take another 78 weeks for capacity to be back in line with historical norms.
“While it is possible that freight rates could increase in anticipation of a capacity reset, FreightWaves and many other analysts don’t believe that freight rates will increase until at least the second quarter of 2024, and few predict large increases in rates even then,” Fuller said.
This environment of uncertainty has made it difficult for shippers to navigate their RFP processes this bid season. Because it is difficult to forecast how rates will move throughout the next 12 months, running bids right now leaves shippers in a precarious position; if forecasts do not hold up, new RFPs could be rendered effectively useless in record time.
It is crucial for shippers to build flexibility into their transportation plans. This ongoing volatile environment has created an opportunity — and a necessity — for companies to take another look at how they move freight.
Fortunately, a slew of forward-looking industry partners have entered the market in recent years, offering shippers more ways to cut waste and boost efficiency than ever before. Flock Freight, for example, is laser-focused on revolutionizing the way shippers handle partial truckloads, creating an avenue for previously unimaginable savings.
Flock Freight offers shippers a shared truckload solution, powered by patented technology, that allows shippers to take advantage of the reliability of truckload while only paying for the space they actually use in any given trailer.
This model offers shippers a layer of nuance and flexibility that has been missing from the industry for decades. In order to take advantage of it, shippers — particularly large shippers — need to approach their operations with a sense of curiosity and collaboration.
Historically, enterprise shippers have not been in the habit of tracking pallet count. Their technologies — including TMS and ERP setups — are often not even equipped to capture pallets and dimensions.
“For large enterprise shippers, a lot of the roadblocks [to savings] come from the operations side of the business,” Todd LaFond, vice president of strategic partnerships at Flock Freight, said. “Most companies don’t know the number of pallets they need to move until an order is actually picked and loaded on their dock.”
At that point, freight that fits within the company’s less-than-truckload parameters is loaded onto a drop trailer. Orders that exceed those parameters are moved via truckload — no matter how much empty space is left in the trailer.
This creates an environment of rampant inefficiencies evidenced by wasted money and unnecessary greenhouse gas emissions. For shippers that want to stop paying for empty space, Flock Freight is ready to step in and help them figure out how to visualize pallet counts and reduce waste.
“As a rule, our core value proposition to most companies that are shipping suboptimal truckloads is that we are able to provide up to 20% cost savings over full truckload rates,” LaFond said. “From a service perspective, our service will be closer to full truckload than to any LTL provider.”
Savings vary from customer to customer and load to load. Because shippers only pay for the space they use in a trailer, those that need less trailer space will naturally save more money. Flock’s machine learning technology plays a pivotal role here by working tirelessly behind the scenes to search the over 1.2 trillion ways to pool their shipments, evaluating over 5 million candidate pool routes, and ultimately finding 5,000 efficient pooling opportunities in near real-time.
Beyond the cost savings realized by switching from partial truckloads to shared truckloads, shippers that move their LTL freight over to a shared truckload model enjoy serious service gains — and decreased damage claims — at a reduced rate compared to full truckload.
“The more open customers are to alternative solutions, the greater their potential for savings,” LaFond said.