Home-Blog-Shippers-You’re not alone: Shippers across the U.S. find traditional freight modes inefficient and costly.

Article

You’re not alone: Shippers across the U.S. find traditional freight modes inefficient and costly.

03.17.2022 | By Peter Frys | 6 min. read

Findings from a Flock Freight study, including that 51% of truckloads moved with empty space in 2021, uncover broader inefficiencies within LTL and TL shipping.

In this blog:

News reports far and wide cover major supply chain disruptions, but a key part of the freight conversation is missing: A startling 51% of the truckloads clogging dockyards and roads are moving at less-than-maximized capacity, a sign of a broader issue.

6 trucks on a road. about half of them are largely empty

The traditional over-the-road (OTR) modes of shipping — less than truckload (LTL) and truckload (TL) — transport a vast majority of freight. From underutilized trailer space to regular instances of damage leading to reshipping, LTL and TL cause excessive waste in the supply chain that’s driving up costs and increasing delays for shippers who, in contrast, are striving for optimization.

While factors like tight capacity and the driver shortage exacerbate delays and raise costs, they’re not the only barriers to economical and on-time shipping. According to data Flock Freight® collected in partnership with Drive Research, the inherent inefficiency of traditional modes is inflating shipping delays and costs in the current freight landscape. 

This blog details findings surrounding existing inefficiencies within traditional freight modes and describes how Flock Freight’s shared truckload (STL) solution helps solve shippers’ most pressing challenges.

To access all the study’s findings, including data about delay durations and shipping costs, download the full report

 

 

Consumers have a need for speed, but traditional shipping modes delay delivery.

Consumer behavior has significantly changed since e-commerce giant Amazon’s disruption of the retail market. The company’s elevated user experience from purchase through delivery has altered consumer shopping expectations, pushing customers to demand more goods, at faster rates and for lower prices: a phenomenon known as the “Amazon effect.” The Amazon effect pressures shippers to deliver quicker, more efficiently and for less money.

To satisfy customer demand for speedy delivery, shippers need a mode that minimizes delays. However, inefficiency within LTL service can prolong delivery. Our findings show that all LTL and volume less than truckload (VLTL) shippers experienced delivery as late as six days in 2021. Such prevalence of delay jeopardizes LTL shippers’ ability to meet standards like the Amazon effect.

2 pie chart demonsrate (1) that 100% of LTL and VLTL shippers experienced late delivery and (2) 95.5% experienced 1-4 day delays and 4.5% experienced 5-6 day delays

Download the full report to see more findings on LTL and VLTL delays.

Combatting delays: Rather than work against shippers’ need for speed, our tech-driven shared truckload solution, FlockDirect™, keeps shipments moving by avoiding the hub-and-spoke system entirely. STL shipments travel on algorithmically optimized routes and remain on one truck from pickup to delivery. Because STL shipments avoid trans-loading, shippers incur significantly lower risk of delay, damage and loss.

STL pickup and delivery route. from left to right: 3 pickup locations, a truck, and 3 dropoff locations

Delays aren’t the only issue LTL shippers face. A growing number of LTL carriers enforce size restrictions that push some shippers out of the mode altogether. In fact, all LTL shippers have experienced tightening cutoffs in the past five years. Forty-two percent of LTL shippers experienced pallet-position restrictions, while another 42% experienced linear-foot restrictions.

Because of shrinking LTL size requirements, four in 10 shippers used a mode other than LTL last year.

Tightening LTL size cutoffs give shippers with midsize shipments very few options for freight transportation. In fact, in 2021, linear-foot restrictions pushed 14% of truckload shippers to initiate TL requests for proposal instead of LTL or VLTL contracts.

While truckload service yields high on-time delivery rates, TL shippers with small and midsize freight face a tough decision: wait to send finished goods until they fill an entire trailer or ship them right away in underutilized trucks. In 2021, 31% of TL shippers “often” chose to hold onto a shipment until they could fill an entire truckload trailer.

Not every TL shipper can afford to prolong shipment until a truckload of freight accumulates, though. In fact, half of truckloads booked in 2021 moved with underutilized trailers.

pie chart: 49% of TL freight filled trailers to capacity, 51% didn't fill trailers to capacity in 2021

Combating TL waste and the pressure to hold onto freight: FlockDirect’s abilities to service shipments of almost any size and fill trucks to capacity enable shippers to send finished goods right away without wasting trailer space, expediting delivery and freeing up valuable warehouse space.

 

 

Bottom-line LTL fees and TL waste undermine cost savings.

In addition to causing unnecessary delays, the LTL and TL modes produce inefficiencies that increase costs, not just on freight shipping, but also finished goods. 

Implementing strategies to reduce bottom-line costs like accessorial and on-time, in-full (OTIF) fees can help shippers reserve capital and, in turn, lower prices down to the consumer level.

The findings indicate a huge opportunity for LTL bottom-line cost savings. All LTL shippers paid accessorial fees on shipments in 2021, and 27% of customers did so “often.” In addition, 100% of participants reported their freight was subject to OTIF requirements, and shippers spent an annual average of $290,242 on associated fees.

text: $411,239 Average accessorial fees LTL shippers paid in 2021

Access detailed bottom-line cost data by downloading the full report.

Although hub-and-spoke transportation is usually the cheapest option on the market, accessorial and OTIF fees significantly raise the overall cost. When holistically considering rates, fees, and damage costs, LTL shipping isn’t as cheap as it appears.

Shippers can book TL service in an effort to avoid these bottom-line costs, but the price of moving underutilized trucks offsets any potential savings. Booking TL service to reduce the risk of incurring accessorial and OTIF fees isn’t a sustainable strategy if freight doesn’t maximize deck space.

Combating accessorial and OTIF fees: By reducing potential for shipping delays, FlockDirect helps shippers meet strict OTIF requirements and bring fees down accordingly.

Plus, Flock Freight bases FlockDirect pricing on pallet position, an incremental cost structure that lets shippers stack pallets for no added charge. FlockDirect shippers pay only for the space they need and, since there’s no need to designate class or cube, never see rate changes because of LTL corrections.

 

 

The fundamental efficiency of FlockDirect yields fewer delays and lower costs.

To meet consumer demand, businesses must achieve faster, cheaper shipping, but inefficiencies inherent to traditional modes work against shippers’ goals. While LTL and TL shippers face a trade-off between speed and cost savings, Flock Freight customers enjoy an inherently more efficient option: FlockDirect.

FlockDirect can help shippers realize cost savings and keep their customers happy by delivering freight on time.


Upgrade to a faster, cost-effective shipping solution.