Driver shortage, ELD mandates, increased fuel costs and fewer driver hours have caused a ripple effect in the market.
Spot market rates are up 30% compared to 2017 and most analysts expect higher costs to continue in 2019.
Solidifying partnerships with experts in the logistics and supply chain space is the key to controlling freight and labor costs long-term. 3PL's provide access to reliable capacity through strong relationships to carrier networks. They identify challenges and solve problems with multi-model solutions and technology that helps mitigate freight market fluctuations.
1. Leverage Technology. In order to minimize costs and provide a better customer experience supply chain leaders must adopt a transportation management system (TMS) that drives operational efficiencies.
The TMS should be integrated with your ERP, have the power to consolidate orders into shipments that are optimized across modes. By integrating the TMS with your ERP, that includes a Business Intelligence Platform, your team will get full visibility that allows predictive analytics to identify opportunities and make better decisions.
Tracking of shipments within your TMS allows organizations to manage by exception. Tracking systems reduce operational overhead and limit the stress on the team by eliminating check calls and emails.
2. Explore Multimodal. With ELD's a shipment that normally takes three days may now take four days. The ELD mandate opens up a fresh new way of thinking with the ability to combine rail with truckload or LTL to be more efficient and cost effective.
3. Become a Shipper of Choice. Solid relationships with carriers are required in market conditions where they are more selective with shipments they book. The organizations that reduce driver wait time, run smooth and friendly dock operations, provide a comfortable breakroom, clean bathroom and pay them quickly will naturally become the shipper of choice.
There seems to be no end in sight with regards to the shortage of trucks. A strong U.S. economy has increased manufacturing, freight volumes and shipping needs.
Total logistics expenditures (which includes, transportation, distribution, warehousing and value-added services) is now 11% of sales revenues (up 10% from 2017).
Partnering with a technology driven 3PL could be your best solution to improve supply chain visibility, control costs and improve customer experience.