Moore on Pricing: Your 2014 truckload pricing checklist

Shippers who are facing pricing pressure from driver shortages, new regulations, and rising fuel and equipment costs frequently ask me: “How can we get the carriers to be more efficient?” I interpret more as: “How can I save money without suffering from poor service?”

By ·

Shippers who are facing pricing pressure from driver shortages, new regulations, and rising fuel and equipment costs frequently ask me: “How can we get the carriers to be more efficient?” I interpret more as: “How can I save money without suffering from poor service?”

By way of response, I like to remind shippers that much of what they do in the freight buying process and in their daily operations drives up carrier costs significantly. To help keep a handle on these costs, I keep a list of elements handy that Dynarate’s Hank Mullen—the sage of truckload pricing—can rattle off from memory. Here are 10 of Hank’s favorites for shippers:

  1. Start in your customer service area and work to extend the notice you give carriers of upcoming loads. Instead of waiting for the warehouse or transportation system to issue freight orders, provide estimates of inbound and outbound needs as early as possible. A day or two of notice is worth money to carriers in optimizing their operations.

  2. Can you take advantage of a backhaul lane of your carrier? Planning time is important. Get to know the truckload carrier’s network and ask about lanes you can work together on.

  3. Do you have the best rates in your supply chain? Your customer or a supplier may have found that lowest backhaul or round-trip rate already. Don’t insist on using your carrier until you check with all of your business partners.

  4. Who are your neighbors? Talk with nearby companies and see if you can jointly schedule a continuous move, joint load, or shared trailer pool.

  5. Are you holding up a road driver at your facility? Under hours-of-service restrictions, you need to help the driver keep moving with “drop and hook” options as well as by providing space for standby equipment.

  6. Do you really need a 53 ft. trailer? If you have dense freight or less than a full truck to move, take advantage of reefer backhauls and 48 ft. trailers rather than insisting on a 53 ft. unit.

  7. Call a LTL carrier. They may surprise you with a truckload rate ( > 10,000 lbs.) in a unique situation (“lane special”) where they need to reposition equipment. You’ll possibly also learn that your LTL carrier is moving long hauls by interlining with your truckload carrier or by intermodal already.

  8. Do you have some hidden truckload freight? Could you possibly increase your volumes by combining more LTL into truckloads? There are systems that can help you explore multi-stop and pool distribution options. Increasingly, we see customers asking for multiple deliveries of smaller amounts during the week to save on space and spread out inventories. Pool distribution contractors will take your truckload and then schedule multiple deliveries from their facility during the week.

  9. Are you paying too much for insurance? If you have corporate coverage for your product through to destination, or if you can sign off on a low release value per pound, then you are entitled to ask for relief in your rates. See the Carmack Amendment and your carrier’s rules tariff for more details.

  10. Can you save on warehouse space with trailers? This may or may not be a plus for your carriers and should not be abused, but it’s worth exploring with your carrier on utilizing storage in transit to pre-stage inventory and postpone warehouse receipt by holding loaded trailers in a safe location. The carrier can balance driver schedules, and the shipper can relieve space pressure and costs in meeting customer demands.

If you’ve spoken to Hank Mullen, as I have many times, you know the list goes on. Shippers can make an impact on a carrier’s efficiency by broadening the scope of investigation into their own operations. Collaboration with your service providers will yield savings every time.


About the Author

Peter Moore
Peter Moore is Adjunct Professor of Supply Chain at Georgia College EMBA Program, Program Faculty at the Center for Executive Education at the University of Tennessee, and Adjunct Professor at the University of South Carolina Beaufort. Peter writes from his home in Hilton Head Island, S.C., and can be reached at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Face security threats head-on. Protect data beyond perimeter.
Traditional Data Loss Protection (DLP) solutions present a number of serious shortcomings and challenges for companies deploying them, creating a clear gap in the market.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Securing IoT data across the connected supply chain
Learn why a holistic approach to IAM is the most effective way to govern access to your systems and information requested by your partners, vendors, customers, and connected devices.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...