There has been a lot of talk this week about freight rates. A recent white paper from FreightWaves analyzed the current rate interaction with carriers and shippers. Their suggested solution was right on, about a “market rate” solution where we don’t live in this contentious rate and capacity environment when these massive supply and demand swings happen. On the heels of this white paper came the DAT report that spot rates were at record levels! I’ve been monitoring DAT rate information for over 15 years, and I can never remember a time where spot rates were close to or higher than contract rates, but it happened in July, and it looks most certain to happen again.
The traditional battle for capacity from carriers, at the cheapest possible rate for the shipper, is entering uncharted waters and this is just the beginning of an epic capacity shortage of trucks and drivers to fulfill the shipper demands in the very near future. Let us start working on solutions that a shipper of choice and a strategic carrier partner can address immediately.
We have drivers that average just 60-65% of their drive time driving! The causes range from: mechanical failures, fueling and looking for parking. But mostly it’s from sitting at shippers. Has the appointment process for pickup and delivery gone way too far, including carrier penalties for arriving early? It is simple to me. Carriers know how to pick up and deliver freight, they know the transit time needed, so let them set the pickup time that meets the expectations of delivery from the shipper. Load and unload trailers quicker with electronic paperwork handled without driver delays. Make a flexible delivery program that is like the airlines. When I used to fly, they had an expected time and gate for arrival. While in transit many times those details changed as the plane got closer to a more accurate delivery time. They quickly alter with complete transparency when an arrival or departure has a weather or mechanical problem. Maybe if the freight in our trucks were humans, we might pay more attention to an efficient delivery process. There is way too much aggravation in this simple process of efficiently delivering freight.
Imagine the productivity outcome of decreasing the sitting time at docks by 50%, adding an additional 2-3 hours of drive time for every driver in the US. The result is enhancing what drivers want to do – drive! That would result in more paid miles which will give our current driver base a wage increase. The shippers will attain more hauling capacity to fill their freight demand. Carriers will do what they do best, pickup and deliver freight efficiently to meet customer expectations.
Stay safe, Jack Porter