Every carrier relies on what are called ‘load boards’ (sometimes called freight boards) which is an online marketplace where carriers, certain shippers and brokers can post and search for loads in order to keep freight moving. However due to the economic forces we’re witnessing, these rate boards are accelerating a critical trend that could cause severe ramifications to shippers and carriers alike.
What the industry is seeing is the continual rise in rates due to a high demand for shipping goods constricted by a limited number of carriers able to fulfill the demand. If for whatever reason a carrier is unable to get to a shipment, then the shipper will need to pay more to entice a carrier to pick their shipment up. This in turn creates a vicious cycle of rates ‘never going down’ and in some cases, have caused rates to double from what they were a year ago.
On the one hand, it’s great to see how valuable carriers have become. However the rate boards are creating a ‘free for all’ mentality in an effort to get the best rate on any given shipment. It is understandable why carriers behave this way, but in the end everyone will get hurt. Carriers will be hurt because these rate boards are causing logistics providers to be perceived as a commodity service, with no intrinsic value. Shippers are forced to pay higher prices (sometimes double!) to guarantee a shipment, which erases their margins and makes it difficult for them to create more products in the long run. Finally, this situation hurts the customer, who is forced to wait for shipments to arrive, creating artificial delays and their dissatisfaction with everyone involved.
So how is this problem solved? The answer lies in shipment optimization. Many if not most of the shipments on these rate boards are marked as ‘full truckload’ when in truth they’re actually ‘partial truckload.’ This is an industry-created problem, one that carriers can work together to solve. Many carriers have proven ready and willing to optimize shipments since it can be done in every company’s best interest. As we become more effective in optimizing shipments, we’ll manage to create a win-win situation for every member of the supply chain.
Here at Zip Xpress, we understand the importance of collaboration. Our goal is to create a win-win solution for every member of the supply chain while ensuring that every shipment arrives undamaged and on time. We’re here to create a more sustainable supply chain and we need the help of other carriers in order to do it. Together we can create a better supply chain and present solutions to our customers during a time when they need it most. If shippers would like to see these solutions for themselves, start today with Zip Xpress!