Alleviating Shipping Capacity Crunch

How can small businesses keep from spending all their precious pennies on shipping? One of the most obvious choices is to avoid shipping products by truck as much as possible.

Mnet 139245 Transportation Lead

As a small business, Legion Logistics understands that every penny counts. We spend money on things that make us money. Our office furniture is from IKEA and our décor is, well, pretty non-existent, because real hardwood desks and fancy wall-hangings don’t bring in the cash. Instead, we invest in our computers, our phones, and most of all, our employees.

Unfortunately for those small businesses that have products to sell, more of their hard-earned money will most likely be spent on shipping and transportation in 2015. Experts are predicting that the current driver shortage will only get worse, making it a carriers’ market rather than shippers’ market.  Changes in hours of service regulations that effectively reduce the amount of time a driver can be on the road are also contributing to the capacity crunch.

How can small businesses keep from spending all their precious pennies on shipping? One of the most obvious choices is to avoid shipping products by truck as much as possible. For many small businesses, shipping by rail (on a train) can be a viable solution. This method usually means longer shipping times, but it is often less expensive. Small business owners may not consider rail because it’s more complicated than shipping by truck or OTR (over the road). Unlike a truck, a train can’t come directly to the loading dock to pick up or drop off freight, so trucks are still involved in the process.

If making all of these arrangements is too daunting for a shipper to take on, a logistics company may be just what’s needed. Logistics companies handle intermodal (truck and train) shipments on a daily basis so they are very familiar with the process and will have contacts and rates already in place.

Using a logistics company to handle truck freight is also a financially sound idea. Business owners often think that adding a third party – which is what a logistics company is – to the shipping process will make it more costly. One more party involved means one more payment, right? But logistics professionals can actually save shippers money – and frustration – especially during this capacity crunch.

Because logistics is their entire business, third-party logistics providers (3PLs) have incredible carrier networks. Their carriers have submitted paperwork, provided references that have been called, and proven themselves on loads. This process saves shippers a great deal of time. They know the drivers have the proper paperwork and are reliable. Professional freight brokers also know what  information is necessary to make sure the shipment goes smoothly, including type of equipment needed, temperature requirements, and whether or not the driver has enough hours to complete the run.

“Deadheading” is the term used for driving an empty truck either to a pick-up point or from a drop-off point. Drivers are more interested in taking a load from Point A to Point B if they also have a load that has to be dropped off at Point A or a load to be picked up at Point B that will help take them to their next destination. Individual shippers rarely need something shipped to their warehouse on the same day they are shipping something out. But logistics companies have hundreds of customers that have freight moving across the country on a daily basis, so they are much more likely to have another load to get a driver where they need to go.

Another issue shippers often face is not having enough freight to fill an entire truck. Called “less-than-truckload,” or “LTL,” this type of load is unappealing to many transportation companies that only want to pick up full loads from a single location. Other carriers that specialize in LTL prefer to combine loads from multiple locations to make a full truckload. Again, the volume of shipments that logistics companies handle makes combining loads much easier for them than individual shippers.

Logistics can be one of the most costly and confusing parts of owning a business, but it doesn’t have to be. A competent 3PL provides its customers with a single point of contact for all freight movement, detailed tracking of shipments, one place to send payments, and the peace of mind that allows business owners to focus on the things that make them money.

About the Author

Legion Logistics, LLC is a service-disabled veteran-owned third-party logistics provider (3PL) based in Florence, Kentucky. What all those hyphens don’t tell you is that the Legion is committed to exceptional customer service, fair dealings with trucking companies and an outstanding, veteran-friendly work environment. Founded in 2009, the Legion specializes in full truckload, less-than-truckload, government freight, hazardous materials and produce shipping. Learn more at legion-logistics.com. 

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