Full truckload is the largest for-hire option in terms of market share, which is 46.4 percent. Whether it be dry van or refrigerated, shipping companies will have faster transit times of their cargo from the point of origin to destination under this transportation mode versus the alternative option of 53′ capacity or intermodal.
Freight is typically set up and wrapped on pallets before being loaded onto the trailer for transportation. Shippers may also floor load , or use slip sheets to load out the cargo trailer. Floor loading and slip sheeting a trailer increases the usable cubic feet capacity of a trailer due to the fact that it allows for more goods to be loaded because of the decrease in the space on pallets and weight of the pallets. Conversely, slip sheeting and floor loading can increase the duration of loading and unloading the product.
When selecting a freight providers, shippers can access a diverse set of options for truckload shipping (dry, temperature-controlled or Haz-Mat capacity) through a variety of the top freight brokers and logistics providers, although technology has really allowed freight brokers of all sizes to access the same capacity and price so it gets down to what is the best fit for the company.
Shippers can also access the truckload directly, but there’s a limit as to the number of motor carriers they can manage by themselves.
Logistics service providers (LSP) are more effective at tapping into the total market by using their technology and personnel that can be utilized cost-effectively over more customers and also generate revenue because of their non-asset-based business model.
There is not only a efficiency factor in finding the capacity via a non-asset service, but also their ability to rapidly check the company for safety as well as legal operating authority, and making the carrier a agreement. These are all crucial factors to ensure the load is put on the road legally.
If shippers receive freight shipments that aren’t big sufficient to fit the full capacity of a 53′ trailer, they change towards LTL or less-than-truckload. Under this freight mode of transportation, the motor carrier aims to consolidate several LTL shipment from various shippers into one 53′ trailer, by clearing regional and local distribution centers that are then transported back to its transload cross-dock to load out the line hauls that will be delivered to the cities of destination. When the cities of destination are reached, the loads are then transferred to a different location in the cross-dock before being sent out to local deliveries.
There is additional information about the LTL model that is what’s known in the industry as a hub-and-spoke network operation, but this summary will be sufficient to get you started.
Larger shippers can perform their own consolidations through an application for transportation management (TMS) platform that optimizes their shipping routes and rates to develop the most cost-effective and efficient load plan for each day’s shipping.
The concept of Freight Consolidation is logistics freight technique where a shipper combines multiple LTL transports within a geographical area into a truckload or intermodal . It is then hauled line-hauling to a destination point where the shipments are dismantled and shipped LTL to their final destination. Utilizing the LTL freight consolidation system brings the benefits of many advantages that will be covered later in this document.
Another freight service mode option is the expedited. There are certain industries that live on expedited freight, such as medical and JIT operations. This freight mode is more costly for shippers. Our suggestion is to do all that you can to reduce the speed of use. This could mean the planning ahead, more communication and getting teams involved to help them understand the cost implications this mode can have on their budgets.
As we put two major modes of freight transportation used within the US to date let’s further discuss the subject matter of cost, comparative pricing and other aspects of how shippers use the different OTR (over-the-road) alternatives to maximize their supply chains and logistics.
Truckload v. Less-than-Truckload (LTL)
As touched upon before there is no one freight mode that is superior to one over the other. The only way to get diversification is to have a free lunch in logistics therefore it is crucial to look at every mode and combination of modes to determine the most effective logistics strategy that is able to meet the needs of a shipper.
Assembling the best load plan for the day is essential to determine the most cost-effective and efficient way for a shipper to move their freight. The process of optimization is best achieved with a transportation management software (TMS) where a shipping company’s freight is optimized according to the basis of rate contracts as well as modes that can meet the needed pick-up and delivery schedules.
Modal conversion is the place where the largest savings can be derived in optimizing the efficiency of freight. The purpose of making the change from one method to another has changed the way shippers transfer cargo efficiently. One of InTek’s greatest strengths is in helping shippers with modal transformation from intermodal to truckload transport. Utilizing the versatility of full truckload import, along with the effectiveness of rail transportation and intermodal transportation, the conversion of modal from truckload and intermodal is simply a way to gain benefits for long-term savings along with other benefits.
What we might call the “pyramid of modality conversion” is described below. the mode on the top is constantly being evaluated by TMS systems to be consolidated into a mode that is below:
In both truckload and LTL there is no way to avoid the impact “big information analysis” has had in transforming the freight cost savings.
The area where the greatest big data cost reductions come through is in the conversion between the freight modes of LTL to truckload as well as from intermodal to truckload.
Modal conversion from truckload to intermodal offers huge potential for saving for shippers who can be combined with the additional transportation option that is associated with intermodal.
LTL cost reductions through big data optimization could be attributed to the capabilities for data analysis that are part of Transportation Management Systems (TMS). Big data also provides companies with the capacity to analyze their full logistics and supply chain system for freight savings and KPI improvement.
Big data and the capabilities of a TMS can bring many benefits for a shipping company’s LTL or truckload logistics logistics network.
Increasing Efficiency for The “Final mile delivery”
The final mile delivery of any method is the least efficient and consequently expensive. The connectivity in today’s TMS systems enhances the capabilities of logistics providers and shippers’ providers to eradicate those inefficiencies. Simply put, knowledge is power, and the information gathered by big data can be an extremely powerful tool for the analysis of shipping, from the beginning to the end.
Reliability Through Transparency
The modernization of supply chain and logistics that have been brought together in the mountain of data that the advanced TMS can quickly summarize make the most complex simple. The operators behind the screens will discern the truth in the data to make better decisions and ensure that the best price and service is an integral part of the equation each moment of the day.
By automating the processes that are working well within the logistics chain, the TMS provides an “bird’s eye view” of the exceptions which need to be addressed to be able to meet the RAD and required arrival date. The removal of background noise helps focus on the problems that increase costs, while improving performance. Through the transparency, comes the trust.
Transportation Management Systems (TMS) have a significant role to play in the effectiveness of optimization of routes for all freight types, however, they are particularly important in the performance of LTL and truckload deliveries as these freight modes are typically the most frequent transportation within the supply chain.
Through the use of a TMS and the information it gathers, carriers are able to use resources in a more efficient way. When the freight is moving, the TMS will continue to provide the feedback to keep the freight in the right direction for timely delivery. Utilizing too many resources, for example, moving several LTL at the same time on the same day, or the same O/D pairing on the same day versus condensing them into one truckload, increases the cost of the freight lane , and not taking advantage of the efficiencies that exist in the load plan for the day.