Riverside Logistics

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Do you use Logistics contracts, or do you buy on the spot market? If you spot buy, I’ll bet that’s been painful lately.

The current commercial transportation market is a “mess” right now. “Mess” is a technical term; it means everything is going in the wrong direction. Capacity is hard to find. Rates are going up by leaps and bounds. Service levels are dropping like a stone. Carrier relationships are becoming frayed. It’s just a “mess” out there in the logistics space.

If you have annual contracts in place with your transportation providers, then you are somewhat insulated from the vagaries of the marketplace for right now. Eventually as the environment persists, and it will, this will catch up with you too. Regardless of your contracts, you may still be seeing carte blanche service embargoes from the LTL segment. These have hit a broad base of shippers and 3PL’s, no matter their size and scale. Depending on your location the pain could be severe as you scramble to change carriers (if that’s an option) to get capacity to handle your freight.

If you buy on the spot market, good luck and God bless! First off, you must find a truck to haul your products. Then you must live with the price of the truck. Truck rates have gone thru the roof, with no end in sight right now. It’s a trickle-down effect. As the truckload segment gets maxed out, the freight shifts down to more expensive modes like LTL (less than truckload). As LTL gets overwhelmed the same thing happens to parcel. Networks get out of balance; rates continue their march skyward and good service levels become a thing of the past.

How did this happen? In a macro sense, it’s a simple equation. More freight, less drivers, and workers to handle it. Carriers furloughed drivers anticipating that the Covid pandemic would persist, and freight volumes would reduce for quite some time. The opposite happened. Freight volumes dipped, then came roaring back. Carriers could not adjust their pools of labor, drivers, dock workers, etc., fast enough to compensate and the network became overloaded.

When is it going to change back to the “good old days”? Not sure about the when, but if I were you, I would plan for the long haul well into late 2022.

What can you do about the spot market if that’s where you live? Tap into a reliable 3PL who already has contracts in place and can provide you with consistent rates for FTL, LTL, Parcel, and Intermodal (if you use it). 3PL’s typically negotiate their rates in annual contracts. Because of this they can provide you with rate stability. The biggest problem in business is dealing with the unknown. If you cannot predict your costs, then you cannot predict your future. A 3PL solution to the current mess is a step in the right direction to controlling your logistics costs.

 

Jim Durfee – Vice President Business Transformation

If you would like more information on our consulting services please call at 804- 474-7700 Option #4

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Why is my Less Than Truckload (LTL) freight pricing going up and my service level going down?

As it stands right now, the LTL (Less-than-Truckload) market is best described as “STRESSED”. This is probably an understatement. All carriers, regional and nation-wide, are saying the same thing. It’s a tough environment out there. Terminals are over-loaded, service levels have deteriorated, embargoes are in place in select markets and pricing is under extreme pressure.

The first question should be “how did we get here”? In one word = PANDEMIC. Carriers anticipated that volumes would dry up due to the pandemic lockdowns. They furloughed and retired staff and drivers only to be left without enough help when the volumes not only returned but increased from pre-pandemic levels.

Now as we fast-forward to today, we are seeing multiple carriers, especially the nationals, shutting down flows into and out of specific terminals to reduce terminal congestion from excess supply. These “embargoes” are causing further stresses to the system. As one carrier shuts off capacity, another gets overloaded, and on and on and on. It’s a domino type effect that is not dissipating quickly.

So, let’s turn to service levels. They are lower, in some cases much lower. Your freight is sitting in the pipeline longer and delaying delivery to your customer. You identify the problem, push for better delivery, but it back-fires on you by causing more delays. The driver shortage is making it very tough for carriers to get the job done.

Finally, the pricing is going up. If you have contracts in place good for you. If you don’t, we would suggest you either get them in place or deal with a 3PL who has solid contractual commitments that won’t rise with the tide.

It’s not all doom and gloom. Carriers are slowly recovering, and capacities are adjusting to volumes. As supply improves, demand subsides, and capacity levels out, the service, pricing and overall market conditions will improve. How fast? Not fast enough. I would anticipate the network balancing in late 2021 or early 2022. Until then, make sure you align with the right partners who can help steer you successfully through this current environment.

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Great visit with Transportation Intermediaries Association (TIA) team!

Scott Claus of Riverside Logistics presents to the Transportation Intermediaries Association (TIA) in Richmond, VAGreat visit with Transportation Intermediaries Association (TIA) team to discuss how Riverside Logistics benefits from its membership. Thanks to Ann Reinke, CEO for visiting with her team to learn more about “Why” Riverside is a member of TIA. Also, received some good information from Matt Evans, Director of Marketing and Communications and Paul Leahy, Director of Membership on upcoming events to better serve its members. We are fortunate to have an advocate like TIA striving to better serve our membership.

 

Riverside Logistics Leaders ship team with the Transportation Intermediaries Association (TIA) in Richmond, VA)Why Join the Transportation Intermediaries Association (TIA)

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If you spend over $100,000 on LTL Freight maybe Riverside Logistics can help.

Let’s see why or why not. Riverside Logistics a third-party logistics company (3PL) has considerable buying power in the freight markets for Less-Than-Truckload (LTL), Parcel and Truckload. We also have a significant presence in the Richmond, VA market handling local container drayage, warehouse and plant shuttles and short-haul dedicated moves. We have a strong local following of carriers. We also have a broad portfolio of LTL carriers that can be applied to any Origin/Destination set.

But we are not an omni-budsman (handle anything) Third Party Logistics Company (3pl). Although we’d like to think that we are very good at what we do, we are not one-size fits all 3PL. If you meet most or all of the following criteria, then you are a great candidate for a partnership with Riverside Logistics. If not, then maybe it’s better to just be friends and move on.

  1. If your company or your branch revenue is between $5 and $100 million in yearly sales.
  2. If you really don’t have a transportation department per se.
  3. If the decision-making is done locally not centrally when the company has more than one location.
  4. If you need both Richmond-based warehousing AND transportation management to go with it.
  5. If your freight spend for all modes of transport is between $150,000 and $3 million annually.
  6. If you use a consolidator like FedEx or UPS to handle all your LTL and parcel and (even) your FTL moves.
  7. If you have no technology platform to tender, route, cost, or track LTL or parcel shipments.
  8. If you can’t create a digital Bill of Landing (BOL) that ties orders to carriers and provides a full data set.

These criteria are benchmarks. We have found in the 25 years we’ve been in business, that companies who “fit” the above criteria do very well in partnership with us. Our overall book of business includes smaller and larger companies, so the above would not exclude you from being a candidate to work with Riverside. However, the above is definitely a “sweet spot” we found that works well. We do business with a lot of different clients with assorted wants and needs. There is no standard way of doing business, but rather key processes that work well across the demands for transportation and warehousing. We customize our solutions to meet the client’s needs and incorporate technological solutions to provide timely and effective answers for their daily transportation challenges.

How does technology fit into the equation? In the good old days manual routing guides were used by and for clients to handle their LTL and parcel shipments. Today Riverside has a robust technology platform that allows client’s to do their own routings. They can electronically tender, track and trace, cost, (and even pay invoices) using this system. It also allows for reporting and research of the data elements attached to each move over the life span of use. It’s a powerful tool that allows the data to be used timely and effectively on either a daily (short term) or long-term basis.

In today’s fast paced world having data is important; but having an experienced team to help you analyze, find efficiency’s and make decisions to add value is a strategic advantage. Supply chains have been disrupted and now more than ever the team of experienced people at Riverside Logistics may be able to help you navigate the faster pace of change.  If you would like to talk to one of our representatives please call us at …804-747-7700 Option 4 or fill out a quote form online.

 

 

 

 

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