This is probably one of the biggest issues that causes strife between carriers and distribution departments more than any other.  This article explores options and consequences of different shipping/receiving department scheduling philosophies.  At the heart of this issue is that carriers get paid by the mile, so they don’t want to wait to get loaded/unloaded, and shipping departments get paid by the hour, so they don’t want to be standing around waiting for trucks to arrive, or add extra labour to accommodate the small periods of “busy” times during the day when trucks show up.

First Come, First Served Scheduling (FCFS)

Depending on who you ask, some people love this method of scheduling trucks for pickup and delivery and others hate it.  This practise tends to favor the shipper and receiver at expense of the trucker.  Usually, it means that the shipping/receiving department has limited resources and has the trucks wait in queue until they are able to be served.  Sounds fair right?  If you get there first you get unloaded first.  However, truckers get paid by the mile and not by the hour.  Having to wait 2-3 hours to get unloaded is unreasonable for the carrier.

This system is not without benefit for carriers some of the time though.  If a carrier can show up “anytime on Tuesday” for delivery, they get flexibility in when they have to be there and it really helps them when unforeseen delays occur like weather and traffic.

Best of both worlds?  A FCFS system with enough internal resources at the shipper/receiver to handle the busiest times.  However, now this becomes expensive for the shipper, they’ll have labour sitting around 90% waiting to serve the 10% of the time when it’s busy.

Appointment Scheduling

Some people love appointment scheduling, others hate it.  Similar to FCFS, it has both benefits and drawbacks.  Appointment scheduling is great for carriers when they arrive on time and get in and out fast.  It’s also great for shippers/receivers because they can plan the load on the department in advance and arrange for the appropriate amount of labour.  This sounds like it’s efficient for everyone! It can be! However, when uncertainty creeps in, it causes problems for this system.  If a carrier gets stuck in traffic, has a breakdown or gets delayed at a prior, all which is in a day’s work for a carrier, then the system breaks down.  If Carrier A shows up for his 10am appointment at 10:30 due to getting stuck in traffic,   there is no one to unload him because the labour is already committed to serving the 10:30 appointment who is there on time.  This is fair right?  Make him wait till 4pm when all the other deliveries are unloaded.  Not really.  It shouldn’t be a punishment to deliver at your  facility!  Strict adherence to a scheduling system causes a lot of bad feelings with carriers who do their best to get your freight delivered.  On the other hand, always accommodating late appointments will earn you the reputation as “the last delivery”.  You’ll forever be accommodating late deliveries.

A Hybrid System, The best of Both Worlds?

There really isn’t a “perfect” solution to this problem.  Each shipping/receiving policy has cost consequences for both the shipper and the carrier.  Any cost absorbed by the carrier, will eventually find its way back to the shipper in the form of rates increases.  So the optimal solution has to be a cooperative one.  One which balances the needs and resources of the carrier with the needs and resources of the shipper.

Some Good ideas:

• An appointment system, with some flexibility to accommodate lates.
• Measure lates so as not to end up accommodating everyone.
• Talk to your carriers and find out what works best for them.  This often changes based on your location, time of day and freight being delivered.
• Fines can work as a deterrent, but must be used with caution.  If carriers find there is no flexibility they will not want your freight, or want to charge extra for the possibility of fines.
• Longer shipping/receiving hours can minimize congestion.
• Being able to move labour over from other departments to accommodate a rush of trucks is helpful if feasible at your company.

XTL Transport can Help You

XTL Transport has been helping customers with logistics problems for close to 30 years.  If you’re looking for ways to reduce cost, improve service, or just reduce headaches, then XTL has solutions for you.  Please contact us for a free consultation.

If you’re having difficulty getting shipments moved in the capacity crunch of 2014 then this article is for you.  Trucking has been booming for the past few quarters.  Record amounts of shipments are ready to move and carriers didn’t add capacity over the last few years because of the slow economy.  Compounding this issue is the supply of truck drivers entering the market is just not enough to keep up with demand.  All these factors have lead to a very tight market for trucks.

1.     Flexible Pick Up Times

A carrier’s day is very complex.  It requires coordination of people, materials and equipment across huge geography.  To add to this, much of what they plan is unpredictable like the weather, traffic conditions, and border wait times.  If you have flexible pick up times this really makes your location attractive to carriers.  If they know they have a large pick-up/delivery window then it’s so much easier for their people do deal with the unforeseen and still be able to pick up and deliver.  Consider more flexible pick up times in shipping/receiving department to attract more carriers to your lanes.

2.     Weekend Pick & Deliveries

There’s a lot of equipment sitting idle on the weekends waiting for pick-ups or deliveries that can only be done on Monday.  If you offer weekend deliveries, this may be attractive to carriers during the capacity crunch because it frees up equipment and eases the load on Monday deliveries.  If you accommodate weekend pick-ups, a carrier who would otherwise have to layover a driver until Monday would be happy to pick up your shipment.

3.     Reduce Time Wasters

Truck drivers get paid by the mile, not by the hour.  Nothing aggravates a driver more than having to wait for long periods of time to get freight loaded, wait for paperwork, Certificates of Analysis, customs documentation or anything else preventing them from driving.  If your facility has a good reputation for getting drivers in and out fast, you’ll have carriers lined up for your business.

4.     Pre-Loaded Trailers

This is another way to offer carriers not only a fast turnaround but a commitment of future freight.  To set up a drop trailer has a small investment to spot the trailer, but offers the carrier quick turn-around.   The trailer can be loaded in advance and the carrier just has to drop the empty and hook up the full.  Fast and easy!  Plus, the carrier knows they’ll get repeat business because their trailer is there.  This is a great way to make things easier for everyone and get a capacity commitment from your carriers.

5.     Be Fair and Authentic

Carriers have a very difficult business to run just like you do.  Their business runs on information for the most part.  They have a huge task of coordination to undertake every day.  If your freight is tendered at 34,000 lbs, it should be 34,000 lbs when the carrier gets there, not 36,000 lbs.  Being fair, open and honest about your freight and the requirements helps the carriers plan better.  If you have a reputation for being fair and authentic, then carriers will be glad to do business with you.

6.     Do what you say and say what you do

An extension of being fair and authentic is to clearly outline requirements for the carrier.  If you’ve committed to pay in 30 days, pay in 30 days.  If you’ve promised a 1 hour load time, load in 1 hour.  If you’re clear and consistent without any surprises, you’ll have a good reputation with the carriers and they’ll choose your freight over someone else’s that may come with “problems”.

7.     Longer Shipping Department Hours

Many shipping departments close at 5 pm.  This leaves the carrier rushing to get there during rush hour traffic and if he’s a few minutes late, he misses the load and has to layover.  This is a big deal for carriers.  If you have the ability to load until 9pm or midnight even, offer this to the carriers.  Many will jump at the chance for a late pick up because it saves them the layover and avoids rush hour traffic.

8.     Cater to Drivers at Your Facility

Make your driver waiting area comfortable and treat the drivers with respect.  Offer them washroom facilities and maybe a free coffee.  This goes a long way with the drivers. You’ll get a good reputation of a great place to pick up and deliver.  Carriers will want to do business with you and drivers will want the loads.

9.     Know the Market

Make sure you’re offering competitive rates.  In the tight market of 2014, rates you paid during the recession are just not realistic.  Make sure you’re paying with the market and you’ll be more likely to get your shipments moving.

10.Consider LTL

It can be expensive, but sometimes if you have no other option, splitting a Truckload shipment into two LTL shipments can open up new opportunities to get your freight moving.

11.Bonus Tip:  Call XTL

XTL has solutions for both truckload shipments and LTL shipments through XTL Logistics.  We can help you find capacity and get your shipments moving. Contact us.

Over many years in the transportation industry I’ve come to recognize that the biggest issue to impact service in terms of cost and/or on-time pickup and delivery is miscommunication between the carrier and the shipper.  Here’s my top 10 list of common miscommunications that impact service.

1.      Freight Weight and Size

Accurate freight weight and size is critical for both Truckload and LTL carriers to make sure that the freight both fits on the truck and doesn’t put the trailer over weight, or out of balance.  Planning a load, particularly for LTL is an arduous task.  Inaccuracies in the weight can make an entire shipment plan no longer work.  One miscommunication about freight weight/size could potentially impact several customers.

2.      Wrong Address

Either the wrong address or a change of address can adversely affect a shipment.  Sometimes the mailing address of shipping point is communicated to the carrier when the warehouse could be located blocks away.   The second type of wrong address miscommunication is where a regular shipper moves and neglects to tell the carrier or their suppliers.  Sending the carrier to an old address not only results in extra charges for all involved, but may impact the delivery if the driver runs out of hours driving to the new address.

3.      HAZMAT Freight

The miscommunications that can happen with a HAZMAT shipment could almost be their own top 10 list!  It’s critical to get the right HAZMAT information to the carrier prior to pick up.  The driver must be HAZMAT trained in order to pick up the shipment.  The carrier has to specifically make sure a HAZMAT driver is assigned to the shipment.  If the shipment is LTL, it cannot be mixed with certain other classes of HAZMAT or commodities.  That’s why it’s important to know the class before pick up.

4.      Temperature Requirements

Temperature requirements are another area of great miscommunication.  “heated”, “protect from freeze”, “keep above 10 degrees C” and “must maintain between 10 and 15 degrees C” mean completely different things to a carrier.  Different equipment may be used in each case and it also impacts what other LTL can ship with a particular product.  Make sure you let your temperature controlled carrier know the exact temperature requirements so they can plan your pick up.

5.      Value

In many cases few shippers even consider shipment value when tendering a shipment to a carrier.  However, if your shipment is valued at over $2.00 per pound, a carrier may think twice about wanting to take the shipment.  There is great risk for a carrier transporting high value goods.  If you have high value freight, this should be communicated in advance to a carrier.

6.      Dock Facilities and Pick-up/Delivery

Carriers generally expect to have a dock facility at truck height to load and unload the freight.  If your pick up or delivery doesn’t have a dock, the carrier needs to know.  Your shipment may have to be re-delivered on a flat-bed, or straight truck with a power tailgate.

7.      Loading/Unloading Practises

If your facility practices live load vs. drop trailers, the carrier needs to know in advance.  In many cases it may not be possible to spot an empty trailer on short notice.  Loading time is also another key factor that should be communicated to the carrier in advance.  A long loading/waiting to be loaded time may eat up the hours a driver has left to drive and result in your freight being delayed by a day while the driver is legally off duty.

8.      Transit Time.

Required transit time is an important piece of information for the carrier.  It could impact whether they send a driver at the beginning of his shift vs. end of his shift.  The carrier may have to dispatch a team of drivers to meet the delivery requirement.  In some cases, the required transit time may not even be possible while adhering to the speed limit and hours of service regulations.

9.     Customs Information

Having the customs paperwork filled out correctly, the name of the customs broker, who the clearing customer is for clearance purposes, and the border crossing point is critical to prevent shipment delay for shipments crossing the border.

10.    Appointments vs. First-Come-First-Served

The carrier may not be aware they need to book an appointment, or have the hours to wait in line to get loaded.  Letting the carrier know in advance allows them to plan accordingly.

In a recent study released by The Conference Board of Canada titled, “We Have Been Here Before” it concludes that since deregulation in 1987 as a whole, the transportation industry has absorbed cost increases while passing most of their productivity gains on to shippers.

Some of the key findings of the study are:

From 1986 to 2003, trucking industry total factor productivity (TFP) increased by an average 1.7 per cent per year. Meanwhile, prices increased by just 0.8 per cent per year on average in nominal terms, while prices dropped in real terms. This adjustment occurred despite average increases in input prices (labour, fuel, capital,etc.) of 2.6 per cent per year.

Put another way, 87 per cent of productivity gains have been used to hold down output prices in the face of rising fuel, capital, labour, and other costs, rather than to increase profit.

This study echoes what most people who work in the transportation industry know to be true.  That trucking is a highly competitive industry where survival depends on productivity gains and price competitiveness.  Generally, any price increases passed along to customers are absolutely necessary and reflective of input cost increases.  And, as the study concludes, most of all productivity gains are used to offset input price increases experienced by the carriers in terms of fuel, labour and insurance cost increases.

Things You Can do to Help Lower Transportation Costs

Many shippers believe that volume buys lower rates.  While this is true to some extent, there is a limit to this logic.  Think about it.  If you drive from point A to point B and add up your time, wear and tear per mile, cost of fuel, etc.  Then do it 100 times and see if your costs go down.  They don’t.  The real challenge to getting costs down is to work with your transportation provider to take cost out of the system.  Here are some areas where you can work with your carrier to help reduce transportation costs:

Waiting Time

Any time spent by the carrier waiting to get loaded or unloaded, is waste.  It’s productive time that is not being used for a productive purpose.  Take steps to reduce waiting time at your facility.  Get trucks in and out fast.  Many shippers have policies of appointment system and/or first come first served systems.  While neither are perfect, the focus has to be on getting the average waiting time for carriers down.  In the end, any unproductive time for the carrier will find its way into your rates.

Fair Assessorial Charges

Many shippers take the approach of trying to eliminate or reduce assessorial charges to unrealistic levels.  Unrealistically low, or non-existent assessorial charges introduce an element of risk for the carrier.  A carrier’s margin is slim and an unexpected cost without compensation can make or break their profitability.  A carrier will have to charge more in their base rate to compensate for the “uncertainty factor”.  Talk with your carriers and negotiate fair and equitable assessorial charges.  This will allow the carrier to price their line-haul economically.

Be a Shipper of Choice

The best, most experienced drivers often have first choice on the loads they want to take.  These most experienced drivers are the low cost drivers.  They know the paperwork, their routes, and how to drive in the most efficient manner.  If these drivers enjoy picking up and delivering at your facility, you’ll be come a shipper of choice.  These drivers will want to frequent your facility.

• Get them in and out fast
• Make the waiting area comfortable
• Provide washroom facilities for the drivers
• Be courteous and polite to the drivers

Pay on time

Paying on time is critical for a carrier’s cash flow.  Trucking is a cash intensive business.  Many of the costs like labour and fuel are paid up front while the revenue gets paid to the carrier much later.  If you’re using a freight payment company to pay your freight bills, make sure they are paying fairly.  Many freight payment company’s make their money on the interest on your money.  That means that to make money, they have to pay your carriers slower than you pay them.  Many do this through strict payment rules and rejecting invoices that often go back to the shipper and don’t get resolved for months.  These costs will eventually end up in your rates if you don’t take action to make the payment process  easier.

In conclusion, shippers have a great influence on the cost of transportation.  Shipping policies and procedures have a huge influence on the shipping rates you pay.  Your carriers operate on thin margins and competitive marketplace ensures they are squeezing out any savings or productivity gains on their end.  Work with your carriers to generate ideas and policy changes to help reduce or offset cost increases in transportation.

Did You Know You Could Impact the Environment with Your Choice of Trucking Company?

Yes, you can!  Carriers that are part of the SmartWay program have been recognized for their efforts in reducing carbon emissions in their fleets by saving fuel and reducing their impact on green house gas emissions.  Green house gasses are thought to contribute to global warming.

What is the SmartWay Program?

SmartWay is a program by the US Environmental Protection Agency and supported by Natural Resources Canada’s FleetSmart initiative.  It works by helping trucking companies’ catalogue and estimate the carbon footprint of their trucking fleet, then helps them put a plan in place to reduce their emissions.  This is a voluntary program, so SmartWay partners are only those who truly care about their environmental impact.

How can You Help?

You can help support the SmartWay program and the environment in two ways.  First, you can join the SmartWay program yourself.  As a shipper, you can measure the carbon impact of your shipping operations and the carriers you choose to move your freight.  You can also help reduce your impact by having no-idling policies at your dock facilities.  The second way you can help the environment is to choose SmartWay carriers more often.  This is the basic premise of the SmartWay program; that shippers, given a choice, will choose to do business with carriers who care about the environment and have taken measures to reduce their carbon impact.

Over 3000 corporations and many fortune 500 companies are already part of the SmartWay program.

XTL is a SmartWay Partner

XTL is a SmartWay Partner.  We’ve been working to reduce our carbon emissions through the SmartWay program.  So, your choice of XTL Transport to deliver your shipments is helping support the goals of the SmartWay program.

If you would like to know more about the SmartWay Program and how XTL can help you, please contact us.