Articles by Month: April 2022
The Wall Street Journal recently reported that last-minute spot loads in the truckload market are once again falling as the shipping demand is becoming more aligned with available truck capacity. This is great news for B2Bs and retailers alike. Still, how can you be assured you’re getting the best Cleveland trucking spot rates? Here, our Cleveland trucking team offers some insight.
Contract Rates vs. Spot Rates
For those who may be unfamiliar, most truckload freight is moved via contract rate. This is when shippers and trucking companies strike a longer-term agreement to regularly move a given volume of goods between Origin A to Destination B at a predetermined, per-mile rate that may/may not be adjustable.
Spot rates are more of a one-off deal, but they still comprise about 20 percent of the truckload freight market. They can include (but are not always) same-day and next-day deliveries. These rates are based on existing supply-and-demand for trucks available to make one-time or inconsistent load volumes slated for specific origins/destinations. Some regions/markets can be much more volatile than others, but the spot trucking market in general tends to be much more capricious, with rates negotiated closer to deadline by the load, the lane, or the time. High load volumes + tight trucking capacity = Higher spot rates.
Companies that tend to rely on Cleveland spot rate trucking usually have lower volumes, inconsistent timing, varied destinations, and special/non-standard load requirements.
It’s worth noting that while news of dropping spot rates is definitely welcome by many shippers, it comes on the heels of rates that have been historically high. Ultimately, you still want to make sure you’re getting the most for your money.
Tips for Scoring Great Cleveland Trucking Spot Rates
Rate negotiation factors are fairly standard, but being prepared and knowledgeable can help ensure you’re getting the best possible deal.
Side note: Best doesn’t always mean cheapest. If you get the lowest price, but it results in a missed pickup, damaged products, or hidden charges, it’s going to cost you much more in the long run. When on-time, intact delivery matters, your trucking partner becomes an extension of your brand. Make sure they have a reputation worthy of the trust you’re placing in them.
Top-performing businesses have always felt big pressure to earn and maintain superior customer satisfaction. These days, however, they’re faced with the herculean task of doing so while grappling with the aftermath of a global pandemic, long-standing labor shortages, and a seemingly unrelenting stream of supply chain disruptions. The good news is: These challenges too shall pass – eventually. However, some recent changes are part of bigger movements that are likely here to stay. Primarily, these include booming e-commerce sales, high demand for direct-to-consumer deliveries, and robust enforcement of warehouse worker rights. One way to gain an edge on the competition is by working with a dedicated Cleveland 3PL warehousing & distribution company – particularly one with a rock solid reputation and the flexibility to shift amid changing times and customer demands.
Recently, the Logistics Managers Index (which measures U.S. supply chain pressures) rose to a record-high. This reflects not only soaring inflation costs impacting inventory and logistics, but also the waning amount of available warehousing space. Bloomberg reports inventory stockpiles many companies purchased during the pandemic may be contributing. Companies are now holding excess inventory at premium rates, something likely to continue for at least another year. Consumer hesitance driven by inflation appears to be further exacerbating the issue. On the flip side, given the global supply chain tumult of late, many manufacturers, suppliers, and retailers have seen the value of having at least some inventory stockpiled so they aren’t caught short.
In any case, one thing is clear: Whereas warehousing was once considered an afterthought for most companies, it’s now recognized as a critical element in the go-to-market strategy for most firms.
“It’s sort of like the shift we saw with the information technology sector in the early aughts,” explained On Time Delivery & Warehouse CEO Anthony Figliano. “What was once basically a background function quickly became a pivotal part of intraorganizational planning – and for good reason. Today, it’s the warehousing and distribution functions that are increasingly acknowledged as mission critical.
“But of course, that’s been at the core of our wheelhouse from the start, so we’ve always recognized its inherent value. As 3PL partners, we’re as committed as ever to continuing to meet fluctuating demands with both top speed and accuracy.”