Riverside Logistics

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Part 1: 2024 a year of Logistics nightmares or a re-awakening?

The Pandemic has taught companies how important their supply chains are to conduct business. When they work, everything moves along as it should. When they don’t work everything breaks down, business norms are destroyed, and it leaves a big scar that lasts a long, long, time.

What will 2024 bring to the Logistics Realm? No-one has a perfectly accurate crystal ball for Logistics going forward. However, there are Macro-level influencers that should be considered when planning your Supply Chains in 2024.

For example:  Medium to Small-sized truckers have been going out of business or shutting down in record numbers in 2023. The cost of capital, insurance, fuel, equipment, and labor have all impacted margins negatively in a big way. Couple that with lower freight rates and you have a recipe for more failures. Currently, capacity is soft, meaning that there are more trucks than loads. When this happens the law of supply and demand kicks in, and rates go down. Spot rates (a “Spot” Load is a load that usually falls outside of a contract, or a one-time shipment and the rate is usually for that specific load only) have dropped significantly over the last 90 days.

Business seems to be stabilizing lately, albeit at lower levels. If this is the trough during the rest of 2023 and heading into 2024, we should expect to see rates stabilize, capacity continues to be soft and shippers becoming more in control of the logistics purchase and sale process.  That is what the current wisdom indicates.

But current wisdom could be wrong! This could be the beginning of a slide into recession. If it is, more carriers will go out of business, putting increased pressure on those left standing to shoulder the load. Shouldering the load means covering expense and making enough profit to justify their existence i.e., higher freight rates or better freight.

Another possibility is if the recession happens and lingers, carriers will be fighting for a diminished basket of freight. Rates could go down, forcing carriers to re-think how much business they want to handle. Once again, this could hurt Shipper’s ability to attract good carriers at a fair  price point.

If 2024 is when the recession impact is felt the most, then you would be wise to hold off on long-term contracts with your Logistics suppliers. The bid-ask environment will get better for Shipper’s over time if the recession does in fact materialize.

What’s on the horizon? More of the same? Or a further deterioration in rates and a further softening of capacity?

I would anticipate both. Keep an eye on the economy. Logistics is a leading indicator for the economy, so it will feel the effects early. If the economy deteriorates further, it will impact rates and service levels. Traditionally, freight rates go down, service levels (may) go up and improve with competition.

Let’s look at some key impacts on Logistics.

Transportation companies are facing more regulation not less. This makes it more difficult to succeed in the marketplace, especially for smaller sized carriers. They will either merge with or be bought out by larger rivals or simply go out of business. Once again capacity will not increase so  rates will remain soft.

Technology is providing more sophistication to the logistics environment. This allows customers to request more information  and more real-time data about their freight. Today, technology is not cheap, and is expensive  to maintain. This strains the smaller sized Logistics providers the most.

Then there is “trouble with the curve”. The yield curve inversion has many economists (and others) concerned that we have a recession coming. Haven’t seen it yet (at least in full form), but if history repeats then we have a recession coming. Once again that would mean lower rates and excess capacity until it stabilizes.

What’s headed your way?

Customers are requiring more touch points. Digitation is allowing technology to provide real-time inputs and make them available to a broad audience. An entire digital marketplace has developed to allow carriers and shippers to connect across a much broader spectrum of loads, shippers, and carriers. The Pandemic accelerated the onslaught of new ways to look at, handle, process and manage the overall Logistics space. Integration of the Eco-Systems (technology systems) is becoming a predominant trend in the logistics environment. Shippers require integration between their ERP systems and logistics provider TMS, WMS, and visibility tools. The 3PL community is having to integrate their WMS, TMS and Visibility software into a complete eco-system. This costs money, sometimes a lot of money.

There will probably be a push by shippers towards more frequent and smaller shipments. This lends itself to LTL. LTL carriers lost Yellow Freight recently and fortunately that capacity was absorbed by the remaining LTL carriers. The absorption process will soak up a good portion of the excess capacity in the remaining carrier base. This could lead to more rate stabilization and maybe even rate increases.

All in all, it’s a cloudy picture on the logistics front for the next 12 months. Keep your “eye on the ball” when it comes to managing your supply chain. If you need help assessing the logistics environment and or your role in it, please reach out to a consultant at Riverside Logistics. They can provide insight and recommendations for how to best tackle this dynamic environment.  They can be reached at 804-474-7700. Option 4. Good luck!

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Capacity Load Freight: More Prevalent and More Expensive

LTL carriers are experiencing a significant increase in large shipments, due in part to tight capacity in the US truckload (TL) and less-than-truckload (LTL) markets. While capacity freight currently applies to a smaller percentage of shipments, that number is growing steadily.

Please be aware of the general capacity load rules and charges that (may) apply to larger shipments.

Capacity loads apply when the quantity of freight, in the manner loaded, utilizes a linear length of between 8ft and 15 ft. Some carriers also have weight limits that trigger capacity loads. The weight limits range anywhere from 8,000 to 15,000 lbs.

The linear length is determined by assuming that handling units will be loaded side-by-side when the dimensions allow. So, if you ship 48 square or 48 x 40 inch pallets then 8 pallets will hit 16 ft. You might argue that if you specify that the freight is stackable, one on top of the other, then you could have more than 8 pallets and still not trigger a capacity load situation. Don’t bet on that!! Most LTL carriers consider the entire load as floor stacked when calculating the linear footage. The point is, be careful. Another scenario is if your pallets are “turnable”, meaning they can be turned so the length is shorter. In this case, if you have 8 pallets that are 40 x 48 and are turnable, then, in theory, the length would be 4 times 40” or 13.33 ft rather than 4 x 48” or 16 liner ft. Although this can make a difference in how pricing applies, be careful. Make sure that you understand how the particular carriers’ rules tariff applies to linear feet.

So, what to do?

One suggestion is to have a 3PL handle the move. There are two strategic advantages  to do this.

  1. 3PL’s are well versed about the rules and how they apply.
  2. They will quote you a price that applies, even if they have mis-calculated

Many 3PL’s have negotiated higher linear foot rules with their carriers and this allows them to get more competitive pricing on larger loads. If you are a “cubic” shipper, one who ships pallets loads that don’t necessarily weigh a lot but take up a lot of “cubic” feet, then using a 3PL with higher linear foot rates could really help you.

Capacity Rules and Linear Feet can make freight costs go up significantly, potentially causing a shipment to cost more than it’s worth. Using a 3PL on large LTL shipments allows you to take advantage of the 3PL’s basket of carriers and competitive price structure without risking unpleasant freight costs.

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Riverside Logistics Hires New Chief Financial Officer with over 30 years of Financial and Executive Management Experience

Melvin Stone - Riverside Logistics - Chief Financial Officer

April 17, 2020

Press Release

Melvin Stone has joined Riverside Logistics as Chief Financial Officer.  He has over 30 years of executive management experience, most recently serving as President/CFO of Surf or Sound Realty in North Carolina.  He and his family are returning to Richmond where he previously served as CFO of Quantum Resources Corporation. In his new role, Stone will be responsible for oversight of all financial business transactions and working with the CEO to identify and capitalize on new business expansion opportunities.

Stone is a graduate of The College of William and Mary, with a B.B.A. in Accounting, and is a Certified Public Accountant.

Riverside Logistics is a third-party logistics and supply chain management company providing a full complement of third-party logistic services and total transportation and warehousing solutions. They are headquartered in Richmond, Virginia.

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Riverside Logistics billboard goes up on interstate 95!

Riverside Logistics is very excited to see our new billboard go up on 95. This is a great way  to be able to tell the Riverside story by using a powerful and strategically located medium. The Billboard is located as you head South on Interstate 95 just before you get to the Chippenham/Route 150 exit. It is also almost directly across from The Richmond Marine Terminal in front of our new warehouse. Please give us a call if you need logistics services near this growing area!

 

 

Riverside Billboard

Riverside Billbaord on 95

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Why use Riverside Logistics for Local Transportation in Richmond, Williamsburg, Ashland, & Charlottesville?

By James Durfee

Use it or lose it. The name of the game in local transportation is “immediate gratification”. You usually pickup and deliver multiple times a day, and your pickups may be stretched out over the course of the 24 hours each day, night or day, rain or shine. Every time you make a pickup you provide the customer with immediate logistics gratification.

Riverside Logistics handles a vast amount of dedicated local movements in the central Virginia area (Richmond, Williamsburg, Ashland, Henrico, and Williamsburg markets). Headquartered near the Richmond International Airport, Riverside manages over 500 thousand square feet of warehouse space, Riverside doesn’t project a profile like your normal local shuttle operator. Riverside has been moving freight from warehouse to manufacturing, from manufacturing plants to warehouses, from warehouses to Ports (Richmond and Norfolk) and from Port(s) to warehouse. Riverside has moved product for locally based, nationally based and international customers for 20 years. They have a strong fleet of locally-based drivers that they utilize. Some of these drivers have been handling Riverside business for over 17 years. It is Riverside Logistics goal to demonstrate an unmatched level of commitment to its drivers and ultimately to its customers.

If your company needs freight to move within the Central Virginia market, either across the street or across the region, Riverside can move it, each and every day. Most shippers that Riverside does business with are repetitive, daily and/or weekly shippers, moving product within and across the Central Virginia marketplace. Local shippers are typically very demanding. They usually allow little room for error. They usually want extra services over and above the norm on an on-demand, as requested basis (ad hoc) and they also want the rates to be extremely competitive. That’s why Riverside has so much local Central Virginia business. We deliver and we use a repeatable process to make sure that we meet ALL of our shipper’s demands, consistently, every day.

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