I saw a news article from the American Farm Bureau before the 4th of July that the average cost of a BBQ or cookout was down 3% from last year. The largest drops were seen in Chicken, Lemonade, and Cookies. The largest increases were in Buns, beef, and potato salad.
So what’s a trucking guy talking about the cost of food for? We like to eat, what can I say?
Trucking prices have a direct correlation to nearly everything you purchase. Food, building materials, vehicles, electronics, paper products, etc., etc. They all have to travel Over-The-Road OTR at some point in their logistical journey to your home, work, or school.
As you are seeing prices at the pump and the stores decrease, this has a parallel effect on trucking prices. They are decreasing slightly, but it is all relative to your needs. If you are involved in the subcontracting of trucks or pricing of cargo, equipment, commodities, widgets, products, or, for a lack of better words, FREIGHT for yourself or your company, keep reading- I will share a few tidbits on how you can influence your transportation costs.
A little about me- I have been in the logistics/warehousing/transportation space since 2006. I didn’t go to college for a degree in Supply Chain Management or Logistical Analysis, so hopefully you aren’t here for references to the Theory of Comparative Advantage or Ricardian Framework. I have spent nearly the last 20 years talking TRUCK though. I have been lucky to learn from some of the best logistics shippers in the country such as FedEx, UPS, Kohl’s, and Grainger to name a few.
Over the last 17 years, I have heard every forewarned scare tactic regarding the “C” word CAPACITY – There aren’t enough trucks, that’s why prices are so high. More loads than there are trucks. I came to believe that with enough TIME or MONEY, there is a truck for every load. Also, that there are 3 Main variables in logistics that always seem to equate to COST. URGENCY - COMPLEXITY - CONSISTENCY.
URGENCY- Lack of planning or last-minute changes to shipments are the #1 driving factor in increased transportation spend. This is due to SPOT MARKET availability. There are several Load Board options such as DAT and TRUCKSTOP.com for trucking companies that play the “SPOT MARKET”. They rely on posting their trucks, and likewise, many Brokers or 3PLs will post their loads to these load boards. Not to take away from the value of these load boards, they are 100% a necessity to handle this type of work, but most of the time you are left with options that are generally higher priced vs. contract rates.
COMPLEXITY- Does your freight require your trucking partners to jump through all sorts of hoops just for a driver to check in? Does it require 43 edge protectors and 19 straps, 3 load bars, and partridge in a pear tree, just for the driver to sit and wait 5-6 hours to be loaded/unloaded? Drivers and Dispatchers catch on to shippers who create more headaches for drivers and in turn, will increase their costs next time. And eventually, simply refuse to pick up from specific shippers in the future.
CONSISTENCY- The more consistently your moves happen, the more likely you are to engage in a transportation partner that can pre-plan your moves. When a trucking partner is able to set their watch to yours, it saves everyone involved a lot of headaches and reduces the driver’s downtime. This does not mean you have to have 10 loads a week, 52 weeks a year to be a consistent shipper. 1 per week, on the same day of the week, with the same pickup and delivery locations, with the same shipping and receiving hours is also consistent. Creating patterns is also a way to create consistency.
Here at Buchanan Hauling & Rigging and Buchanan Logistics, we strive to create long-term partnerships with our clients. One’s that help reduce the perception of urgency by being more proactive vs. reactive. We can eliminate complexity by partnering with the right drivers who are properly trained and know your business inside and out. As well as promote consistency with proper planning and forecasting. If you or someone you know is looking to improve their transportation experience, please reach out to one of our skilled reps and visit us at www.buchananhauling.com
