At PartnerShip, we love our carriers. We offer quality service to our customers because of the quality of our freight carrier partners; if it weren’t for them, our customers couldn’t ship and receive their freight in a timely and cost-effective way. Simply put, our carriers help us help our customers ship smarter. 

This month, we celebrate our first-ever Carrier of the Month, Royalton Star Inc. of Parma, OH! They have been in business since 2009 and operate 12 trucks.

The Carrier of the Month program recognizes carriers that go above and beyond in helping our customers ship and receive their freight. PartnerShip truckload team members nominate carriers throughout the month that provide outstanding service in communication, reliability, on-time performance and flexibility to our shippers, receivers and our team.

For being our April 2018 Carrier of the Month, Royalton Star receives lunch for their entire office, a sincere letter of thanks from our team, and a snazzy framed certificate to proudly hang on their wall! The gestures may be small but the appreciation is huge!

Interested in becoming a PartnerShip carrier? We match our freight carriers’ needs with our available customer loads because we understand that your success depends on your truck being full. If you’re looking for a backhaul load or shipments to fill daily or weekly runs, let us know where your trucks are and we’ll match you with our shippers’ loads. If your wheels aren’t turning, you’re not earning.

Truckload shipping costs have been steadily climbing and are poised to go even higher because a perfect storm of events is pushing truckload rates to record highs: the looming Electronic Logging Device (ELD) mandate; the cleanup and aftermath of Hurricanes Harvey, Irma and Maria; and an already significant driver shortage that has stressed truckload capacity.

Let’s look at these factors one by one.

ELDs
An ELD is electronic hardware that connects to a truck’s engine to automatically log a driver’s hours of service (HOS) and fleets and owner-operators have until December 18th, 2017 to implement them. In a previous blog post on ELDs, we anticipated that ELDs would have an effect on pricing and freight rates caused by decreased productivity and reduced capacity.

• Decreased productivity. Carriers that have implemented ELDs have reported average productivity decreases of approximately 15%. ELDs track drive-time so drivers can no longer log 400 miles when they actually drove 700.

• Reduced capacity. Some owner-operators will leave the industry because of their loss of productivity and the associated loss of income, further reducing truckload capacity.

Hurricanes Harvey, Irma and Maria
These three hurricanes hit the US within a four-week span and left massive destruction and flooding behind. These hurricanes have had a significant impact on truckload capacity. Recovery efforts required immediate emergency supplies and aid, which shifted truckload capacity to the affected areas, leaving other parts of the country with much less capacity. As recovery and rebuilding continues, truckload capacity will continue to be reduced.

Existing driver shortage
This issue has been building for years. Drivers are leaving the industry as they retire or move on, and younger people are not entering the industry to replace them. The driver shortage causes truckload capacity to tighten, which pushes rates higher and higher. According to Bob Costello, chief economist for the American Trucking Associations, “We may be seeing the beginnings of a significant tightening of the driver market.” At large truckload fleets, driver turnover in the second quarter of 2017 jumped 16 percentage points to 90%; for small fleets, it was up 19 points to 85%.

This combination of factors has led to the tightest truckload spot market in at least four years and freight brokers are working hard to obtain truckload capacity for shippers, but be prepared, rates are going up with no end in sight.

According to Logistics Management, experts expect the current stressed capacity situation to continue well into 2018 partially because of the productivity loss that is expected from the ELD mandate. If you’re a shipper, you should probably prepare your company management to expect higher transportation costs for the next 12 to 18 months.

During the last week of September, the number of available loads on the truckload freight spot market jumped 5.4%, the number of available trucks dropped 3.2%, and tight capacity sent the load-to-truck ratio into uncharted territory, according to DAT Solutions.

DAT said load-to-truck ratios were higher for all equipment types:

• Dry van: 7.0 loads per truck, up 10%
• Flatbed: 50.2 loads per truck, up 16%
• Refrigerated: 12.4 loads per truck, up 2%

DAT said average truckload spot rates continue to remain at two-year highs and demand for truckload capacity in September was up 15% from August, and up 80% from September 2016.

Here’s the takeaway: you will be paying more for truckload freight and it will be harder to cover your loads.

When rates go up and capacity tightens, shippers tend to look for help and reach out to freight brokers and third-party logistics companies to tap into their network of carriers, and take advantage of their expertise in truckload pricing and rate negotiation. The shipping experts at PartnerShip will work with you to cover your loads and secure the best truckload freight rate possible. We know the lanes, we know the rates and we will help you ship smarter. Contact us today to get a free quote on your next truckload freight shipment!

It’s sort of like the “Twilight Zone” of freight: the murky gray area between less-than-truckload (LTL) and full truckload shipping. Many shippers only use either LTL or full truckload, but sometimes a load is bigger than LTL but not as large as a full truckload. When this happens, you can ship your freight partial truckload or volume LTL.

Do you know the difference between partial truckload and volume LTL shipping? Or when you should use these services? Understanding partial truckload and volume LTL shipping and when to use each will make you a smarter, more competitive shipper.

In the LTL world, these in-between shipments are called volume LTL, and in the truckload world they are called partials (for partial truckload). For many shippers, the choice between services depends on transit time, rate and service level required.

First of all, let’s define the services and explain the difference between partial truckload and volume LTL shipping.

Partial truckload
Shipments that are larger than LTL but less than a full truck trailer are considered partial truckload. Partial truckload shipments usually range from 8 to 18 pallets, 8,000 to 27,500 pounds, and occupy more than 12 feet of linear space in a trailer.

Volume LTL
Large shipments that do not require a full truck trailer and that are typically 6 or more pallets, weigh over 5,000 pounds, or occupy more than 12 linear feet in a trailer can be considered volume LTL.

Clear as mud, right? The reality is that in many cases partial truckload and volume LTL freight is the exact same thing, but the differences are in its pricing, classing, transit time and handling.

The main differences between partial truckload and volume LTL shipments:

• Partial truckload shipments do not require a freight class; volume LTL shipments do
• Partial truckload rates are established by the market and are determined by mileage, specific lane, weight and space required; volume LTL quotes are obtained from an LTL carrier and are based on a carrier’s published LTL rates
• Partial truckload carriers usually do not stop at hubs or terminals, leading to a higher percentage of on-time deliveries, less handling of freight and less damage
• Partial truckload carriers typically offer freight insurance, which is often greater than the freight liability LTL carriers offer
• Volume freight must be crated or on pallets in order to move through an LTL carrier’s system; truckload freight does have the same requirement

To illustrate the potential difference between partial truckload and volume LTL pricing, we priced out a sample shipment.

The freight:

• 8 pallets, 48”x40”x96”
• 12,530 lbs.
• Non-hazardous, non-flammable petroleum oil in plastic bottles (Class 65)
• Ship from: Macedonia, OH 44056
• Ship to: Laredo, TX 78040

Volume LTL cost - $1,593.00

Partial truckload cost - $1,195.00

LTL networks are generally optimized for shipments less than 12 linear feet and one to six pallets, and because this shipment example falls outside of those parameters, the volume freight cost is higher than the partial truckload cost.

Some helpful partial truckload shipping tips:

• Shippers must be more flexible on the pickup and/or delivery dates than for LTL shipments
• Loads traveling less than 250 miles are usually not good candidates for partials
• Floor-loaded or loose items are not ideal for partials
• Partial truckload shipping rates are contingent on available capacity, lanes and distance
• If pickup or delivery appointments are required, there is a high probability that appointments will be missed and layover fees may apply due to the variables involved with partials

Partial truckload services aren’t offered by every carrier but a freight broker like PartnerShip can help you find partial truckload or volume LTL capacity. We work with a large network of LTL and truckload freight carriers and will find you the best rate and service level for your needs. Contact our shipping experts at 800-599-2902 or email sales@PartnerShip.com whenever you need to ship smarter.

Get a free quote on your next LTL freight shipment or truckload freight shipment!

Hurricane Harvey was one of the most devastating storms of the past century and the cleanup is underway in Houston, Texas. PartnerShip wanted to do its part to help recovery efforts and has partnered with several local Westlake, OH community organizations to provide drop-off locations for items needed to help Houston and its residents get back on their feet. PartnerShip will pay the cost of shipping donated items to the Houston Food Bank. 

“We wanted to help,” says PartnerShip President and COO, John Finucane, “and the best way to do that was to arrange and pay the cost of shipping the most needed items, like non-perishables, paper products and cleaning supplies, so that they could be distributed to those that need it most.”

The needed items list includes:

• Canned, ready-to-eat items with pull tops, like vegetables and fruit
• Protein in pouches or pull-top cans, such as tuna, beef stew, chili, and canned chicken
• Peanut butter
• Snacks, like granola bars, breakfast bars, etc.
• Toiletries, paper goods and diapers
• Bug spray
• Garbage bags and cleaning supplies, like mops, buckets, brooms, bleach wipes, and bleach

Donations can be made at these Westlake, OH community drop-off locations:

• Westlake Porter Public Library, 27333 Center Ridge Road, Westlake, OH 44145
• Westlake Rec Center, 28955 Hilliard Boulevard, Westlake, OH 44145
• PartnerShip, 29077 Clemens Road, Westlake, OH 44145

While we appreciate any act of generosity, we ask that these items not be donated: clothing, used items, fresh fruit and vegetables, and perishable food items.

Our neighbor SJT Enterprises will store, sort and palletize the donations until they are ready to be shipped to Houston.

If you would like to help in the recovery, monetary donations can also be made to your choice of organization:

• The Red Cross
• The Humane Society of America
• Houston Food Bank

Drop-off donations will be accepted until Saturday, September 30, 2017, but financial donations can be made at any time to the organizations listed above.

One of the most devastating storms of the past century, Hurricane Harvey, has left its destructive mark on Houston, Texas, and its impact will create a ripple effect on shipping that will be felt for months, if not years.

The entire PartnerShip team holds everyone impacted by Harvey in our thoughts, and we'd like to thank everyone that has assisted in the relief efforts.

According to DAT, inbound and outbound freight volume for Houston was down 10 - 15%, and its analysts expect that number to hit 75 or 80 as storm clean-up begins.

Logistics research firm FTR predicts similar countrywide supply chain effects and increases in rates. “Look for spot prices to jump over the next several weeks with very strong effects in Texas and the South Central region,” according to FTR economist Noël Perry. FTR noted that rates gained 7 percentage points in the five months after Hurricane Katrina in 2005 and spot market rates jumped 22% in the weeks following massive snowstorms in 2014.

FTR states that the most immediate effect on capacity is caused by trucks waiting for the area to become passable so they can resume operation. Longer-term effects to capacity will include the relief shipments, additional construction supplies as the area rebuilds, reduced productivity due to freight lane shifts and rerouting, and increased congestion at loading docks caused by these supply chain disruptions.

Other considerations for shippers:

• Harvey has shut show about 20% of US oil refining capacity in Corpus Christi, Port Arthur, Lake Charles and Houston. The disruption will drive up fuel prices and the fuel surcharges carriers charge for every load.
• As noted, carrier capacity is going to get tighter. FEMA and other agencies are putting pressure on the market to move equipment and supplies to the area. This capacity tightening should first affect flatbeds to move heavy equipment, then reefers to move food, then dry trailers for dry goods and other supplies.
• It is likely carriers may struggle keeping their commitments to you in the short-term as FEMA and other agencies will pay a premium to move needed equipment and supplies. You may need to shift your carriers around in order to secure the capacity you need.
• Your transportation costs will increase. Be prepared to pay 5 - 22% more in the short term.
• Your customer demand will change. Your customers or suppliers may cancel shipments, or add shipments, or reroute shipments. Until operations in the Houston area resume and get back to normal, there will be interruptions in every industry’s supply chain.

The holidays are approaching and that means an increase in small package shipping. If you use UPS for residential Ground shipping, you’ll also see new holiday residential shipping surcharges from the Atlanta-based company.

UPS announced that it will add a 27-cent charge on all Ground residential packages sent between November 19 and December 2. This includes two of the busiest online shopping days of the year, Black Friday, which is November 24 and Cyber Monday, which is November 27.

The charge hibernates for two weeks, then returns December 17 through December 23, during which time all Ground residential deliveries will see the additional 27-cent charge, plus an additional 81-cent charge for next-day air shipments or an additional 97 cents for two-day or three-day delivery.

According to financial news outlet Bloomberg, the surcharges will increase the cost of UPS residential deliveries by roughly 3 percent.

The stated reason for the company’s surcharge increases is that online shopping and e-commerce has grown significantly over the last twenty years and UPS sees a huge influx of packages during the holiday shopping season that puts stress on its systems, processes and machinery. On an average day, UPS processes around 19 million packages but during the holiday season, that number swells to 30 million packages.

In order to meet demand, UPS says it has to add planes, trucks, and thousands of employees; and the surcharges are necessary to offset the additional cost of the holiday package surge.

“UPS’s peak season pricing positions the company to be appropriately compensated for the high value we provide at a time when the company must double daily delivery volume for six to seven consecutive weeks to meet customer demands,” according to Glenn Zaccara, a spokesperson for UPS.

UPS is also adding a Large Package surcharge of $24 and a Over Maximum Limit surcharge of $249. Both of these UPS surcharges are effective November 19 through December 23, 2017.

In a notable departure from UPS, FedEx will not apply residential surcharges this holiday season, except for packages that are big or bulky enough to require special handling.

Between November 20 and December 24, 2017, FedEx Express and FedEx Ground in the U.S. and Canada will increase the additional handling surcharge by $3 per package and $25 per package for oversize packages. The largest surcharge of $415 per package is only applied to packages that exceed the FedEx maximum size limit and cannot move through its sorting equipment.

With the additional handling surcharge for oversized packages, both UPS and FedEx are trying to discourage large and heavy, odd-sized shipments, because they cannot pass through its automated systems and require additional handling. In fact, the volume of oversized packages handled by FedEx Ground has increased 240 percent during the past ten years and is now 10 percent of the ground operation’s volume. This is “largely driven by expansion of e-commerce into sports equipment, furniture, mattresses and other things that weren’t largely available on e-commerce 10 years ago,” according to Patrick Fitzgerald, senior vice president of marketing at FedEx.

It's important to evaluate how you these changes might affect your shipping costs. Through a PartnerShip-managed shipping program, you can receive significant discounts on select FedEx services - resulting in savings that can help to offset cost increases like these. If you're not sure if you qualify for one of our small package shipping programs, contact us and we'll find the solution that's right for you.

• When you have strategic partners that rely on you for goods that are components needed to finish a product, such as seats shipped to an automobile manufacturing facility that has a just-in-time inventory management strategy. If your shipment doesn’t arrive when it is needed, the entire plants may need to be shut down until the freight arrives
• When you are shipping to a retailer that has strict delivery window requirements. Missing these delivery dates and / or times may result in chargebacks of around 3% of the value of the purchase order. So if an order valued at $50,000 was early or late, you’d pay a $1500 fine. Paying extra for expedited LTL shipping to avoid fines is a small investment
• When you are shipping high-value goods. Remember, expedited shipping has fewer touch points and fewer opportunities for damage and / or theft to occur
• When you employ a just-in-time or lean inventory supply chain strategy to lower your inventory costs
• When critical machinery breaks down and replacement parts are required to keep an operation functioning

Refrigerated truck trailers, commonly called reefers, allow freight to be temperature-controlled from pickup to drop-off. All reefer shipments have one thing in common: the trailer in which the goods are loaded has a built-in refrigeration system to regulate the temperature and keep the freight at its pre-shipment temperature.

In 2015, the Federal Motor Carrier Safety Administration (FMCSA) established standards for Electronic Logging Devices (ELD). An ELD is electronic hardware that connects to a truck’s engine to automatically log hours of service (HOS). Regulating a driver’s hours of service is to prevent accidents caused by driver fatigue. Fleets and owner-operators have until December 18th, 2017 to implement use of ELDs if they have not already done so.

One of the factors surrounding the ELD mandate is its impact on freight costs. In this blog post, we’ll look at some of the factors that will drive freights costs up with use of ELDs. Let’s examine these factors one-by-one.

• Cost of implementing ELD. When electronic logging devices were introduced 20 years ago, a single ELD cost up to $2,500. Today, the FMCSA estimates that the average annual cost of an ELD will be $495 per truck. The cost to implement ELDs will be passed along to shippers but will only marginally drive freight costs up.

•  Decreased productivity. Most carriers that have implemented ELDs have reported productivity decreases of approximately 15% with fewer miles driven per day. ELDs track drive-time to the minute so operating logs can’t be “fudged.”  A driver can no longer report 300 miles driven when they actually drove 600 miles. Some carriers are charging more to make up for this loss in productivity. 81% of large fleets (more than 250 trucks) have achieved full ELD implementation so their rates have “normalized” by now. For smaller carriers, expect nominal price increases of 5-10% for loads that are booked on the spot market.

•  Reduced capacity. Some owner-operators will view the cost to implement ELDs combined with the decrease in productivity as “big brother” meddling in their business and will leave the industry, reducing capacity.

So, what effect will the electronic log mandate have on freight rates? According to transportation economist Noël Perry, truckload rates will increase about 4% this year, with additional capacity pressure caused by the ELD mandate. “The maximum impact will occur in 2018,” says Perry, “and it won’t stop until two to three years afterwards when people finally figure out they have to do it.”

Truckload capacity utilization is expected to remain greater than 100% well into 2017 and Perry puts the chance of a “significant” capacity shortage at 60%, with a 30% chance of a “real whacko” shortage. He also notes that the spot market tends to be much more volatile, with the 4% increase in contract rates translating “easily” to a 15-20% increase in spot pricing.

So, what will electronic logging device regulations mean to shippers?

• As carriers procrastinate to comply with electronic logging device mandate, it will result in fewer available carriers. Consider working with a broker/3PL to offer additional resources to keep your freight moving without any delays.

• Loss of carrier productivity means that shippers will need to better manage their time to ensure on-time delivery. For example, lanes that range from 450-700 miles will be affected as these lanes will turn into two day transit hauls instead of one.

• The truckload capacity crunch could shift some freight that would normally move via truckload to LTL. Working with a broker or 3PL that routinely handles both truckload and LTL will ensure that your business keeps its freight moving!

• Shippers can help drivers become as efficient as possible to decrease time spend on duty, but not driving.  Following these suggestions will increase driver efficiency and create additional capacity to drive down your shipping costs:

o   Have flexible shipping/receiving times

o   Reduce driver wait time

o   Quickly and efficiently load drivers

o   Provide and offer legal parking at pickup and delivery locations

•  Using a broker/3PL will help you fully vet carriers and their ELD compliance.

• Most importantly, as capacity tightens, expect rates to increase. Working with a freight broker or 3PL can help you find the carrier capacity you need and negotiate rates on your behalf.

Working with a freight broker can help you mitigate the costs associated with electronic logging device regulations. Contact PartnerShip at 800-599-2902 or use our contact us form to see how we can help you ship smarter so you can stay competitive.

It is a very common question for shippers: "Should I use a freight broker?" Before we list five important reasons why you should use a freight broker, we answer the question, “What is a freight broker?” A broker arranges freight shipping between a carrier and a shipper. In exchange, the broker receives a small commission for facilitating the transaction. That’s how freight brokers make money.

So, why use a freight broker? Efficiency. A freight broker adds value and flexibility to your supply chain and that becomes your competitive advantage. Focusing all of your energy on what you do best gives you an edge and helps you stay competitive.  Unless what you do best is shipping, you should consider using a freight broker to manage your shipping and logistics functions.

Big companies got big because they focused on what they did best. In fact, 85% of Fortune 500 companies use third-party logistics providers like freight brokers. That’s not a coincidence; it’s a cause-and-effect relationship. Every dollar saved on shipping goes right to the bottom line.

Consider these five important advantages of using a freight broker:

1. Save time, save resources, save money. With a freight broker as a strategic partner, you have the benefit of your own dedicated shipping department without the expense your own dedicated shipping department. You also don’t need to spend time on invoices, audits and training, Using a freight broker lets you focus on your business. 

2. More flexibility, more scalability. A freight broker partner is able to provide you more, or less, capacity as your business goes through its natural cycles. So there’s no need to stress over seasonality, irregular spikes or sudden troughs in your business.

3. Shipping expertise. What freight brokers do best is shipping, and working with one allows you access to their knowledge of best practices and real-world experience. It also allows you to access the latest technology for shipping reporting and visibility into your logistics.

4. It’s not just what you know, it’s who you know. Freight broker partners have expansive carrier networks that provide many advantages over an in-house shipping department. They have buying power and can provide volume discounts, lowering your shipping expenses. They also can provide access to capacity that otherwise would be unavailable, or very costly, to an internal shipping department.

5. It’s a partnership. Your freight broker works for you and will put your interests first, because when you succeed, they succeed and when your business grows, so does theirs. That’s the definition of a partnership: benefits for both parties.

Need more convincing about the benefits of using a freight broker? Call PartnerShip at 800-599-2902 or contact us and see how we can help you ship smarter so you can stay competitive.