Why is Ohio LTL Freight So Pricey – and How Can I Reduce the Costs?
Less-than-truckload (LTL) and full truckload (FTL or just TL) are the most common types of freight shipping in most industry supply chains. Unfortunately, Ohio LTL freight shipping prices have risen substantially in recent years.
At On Time Delivery & Warehouse, we pride ourselves on pricing transparency and strive always to provide the most competitive LTL shipping costs in the region. Understanding why costs are higher these days is important to formulating a workable strategy to keep those expenses manageable while still ensuring your shipments are getting where they need to be – intact, on time, every time.
What is Ohio LTL Freight Shipping?
Approximately 54 million tons of freight are moved on trucks daily in this country, according to the U.S. Department of Transportation. A considerable share of this is hauled on LTL loads.
Anytime your shipment takes up an entire truck (typically somewhere around 42,500 lbs. or 24 pallets), it’s called a full truckload. When the weight or size of your shipment is less than that, you have the option of shipping items via less-than-truckload. LTL is sort of like a rideshare service with multiple passengers, but for freight.
On a per-mile, per-unit basis, Ohio LTL freight is often more costly. However, that doesn’t necessarily mean it isn’t the most cost-efficient option for the specific needs of your business.
Some benefits of LTL shipping include:
- Tracking and tracing. Transparency and visibility of shipments is important to our clients as well as their customers. Knowing transit times, the location of shipments, estimated delivery times and more can be invaluable.
- Service options. These can include pick up and delivery, liftgate service, import/export freight handlers, hotshot deliveries and more.
- Earth-friendly. Shipping via LTL allows carriers to use all the room on the truck, meaning each shipment is efficient and eco-friendly.
These should be factored when considering whether LTL makes the most financial sense for your firm.
Why Are LTL Costs Getting Higher?
There are numerous factors contributing to higher LTL shipping prices. Like any other business, Ohio trucking companies must take on certain operational costs which occasionally increase, in turn impacting the prices they charge. Some of these include:
- The purchase and lease of equipment (including repair and replacement of aging equipment).
- Securing the necessary licenses and certifications.
- Tolls, taxes, registration and insurance.
- Hourly wages/salaries of administrative staffers who manage freight movement.
- Driver compensation.
The purchase of equipment is recognized as a long-term investment for Ohio LTL freight shipping firms. Costs like driver wages, fuel and maintenance not only cover the investment, they are critical to profits. Often, fuel is the largest marginal expense for trucking companies. In recent years however, the cost to compensate drivers has spiked, contributing to a sizable uptick in shipping costs.
Although technology allows third-party logistics and trucking companies to efficiently manage maintenance costs and fuel use, driver compensation is likely still to climb, according to a recent report by the Journal of Commerce. The reason is a driver shortage. Not enough drivers to fill all the trucking industry positions means companies have to offer considerable enticement packages.
The American Trucking Association’s Driver Compensation Study (which analyzes data from more than 100,000 drivers) revealed increased pay, benefits packages and other enticements were being used to recruit and retain experienced, safe drivers in a market that’s increasingly tight. The median annual salary for a truckload driver on a national, irregular route was $53,000 last year. That’s 15 percent more than it was in the ATA’s last survey in 2013. Private fleet drivers are paid more, with a median annual salary of $86,000 – 18 percent higher than it was seven years earlier.
LTL drivers are sometimes paid more because they are dealing with high touch loads with multiple stops. Keep in mind too that the type of freight, load size and destination can also impact your Ohio LTL freight shipping price tag.
Keeping Your LTL Shipping Costs in Check
Until the driver shortage subsides, Ohio LTL shipping costs are likely to be higher than what many firms have grown accustomed to. We understand that’s a difficult position to be in. We do our best to help clients navigate the cost tiers and look for ways to keep shipping expenses reasonable.
Cleveland third party logistics (3PL) firms can offer some savings by helping businesses manage the sometimes labyrinthine process of finding partners to work with on making a combined load that meets the demands of each specific supply chain. We use a battle-tested transportation management system. Not only does streamlining an otherwise diversified shipping process allow you to focus on your core business, it gives you the advantage of lower chargeback rates, more flexibility in responding to consumer demands and reduced labor and shipping costs.
Being in the business of getting your shipments where they need to be – intact, on time, every time – we’re committed to customized shipping solutions for our clients and their customers. That can range from appointing a dedicated account manager to work as a liaison for your business’s shipping department to offering a full-scale dedicated service. It all comes down to what your firm needs.
Although Ohio LTL freight shipping may be more expensive than it has been in recent years, our team is dedicated to helping meet your needs to keep your costs manageable and your goods moving.
Contact On Time Delivery & Warehouse by calling (440) 826-4630 or send us an email.
Strong LTL market still has some bumps in the road, March 16, 2021, By Todd Maiden, FreightWaves.com
More Blog Entries:
4 Questions to Ask Your Cleveland Freight Station, May 31, 2021, Cleveland LTL Freight Shipping Blog