Freight Demand

Freight demand has been lower than expected. We demanded to know why.

Freight demand was lower than expected in late September and early October. Traditionally, this has been a peak shipping point in the season due to retailers stocking up merchandise to accommodate for holiday shopping. However, this peak has been less prevalent in recent years, and especially appears to be down in 2012. We used our industry knowledge and insights to uncover two fundamental reasons why:

1. Shift in inventory models

It’s difficult to prove this concretely, but there are those who theorize that many firms decided to shift further away from traditional inventory models (where retailers stock up their shelves during strong economies) and move closer to the concept of a Just-In-Time inventory model.

The Just-In-Time inventory model has merchandisers minimally stocking their shelves during September/October and only ordering more product when needed. This way, they avoid over spending up front and not having the sales to match the large cost of their inventory. The prior thinking was to fully stock your shelves in September/October and bank on a strong holiday season.

2. Slow or stagnant economy

Even with the shift in inventory models, 2012 demand seems to be well below average for this time of year. This could be an indicator that growth for the 3rd and 4th quarter may be slower than originally predicted – most industry forecasters called for gross domestic product (GDP) to grow between 2-3% over this period. A slow economy and an underperforming GDP are a good recipe for reduced freight demand.

What does this mean for shippers?

Regardless of why demand is down, or what this indicates, the fact remains that there is less freight moving in the market. This translates, at a macro level, to generally lower pricing and more available capacity. As of right now we are anticipating the softer demand will last through the remainder of 2012 and into early 2013. The next significant demand surge will likely occur in February/March of 2013, but a lot could change between now and then. We believe shippers would be wise to take advantage of this lull in freight demand and the potential pricing benefits it brings.

Find out if rates have lowered in the lanes you ship in by visiting www.freightquote.com.

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A Cure for Freight Class Fever

Freight Classification can be a tricky thing. There are thousands of item numbers to choose from and once you find one that looks right, you have to determine if there are packaging requirements, density requirements or some other hidden note that you didn’t spot.  In total, there are 18 classes to choose from ranging from 50 (lowest) to 500 (highest).

Let us break it down for you. The NMFC (National Motor Freight Classification) classifications provide a standard way to analyze commodities. The class assigned to each product is based on four factors common in transportation: density, stowability, handling and liability. Evaluating products in the marketplace and assigning classifications to them makes it easier for shippers and carriers to negotiate rates.

Classification aims to separate distinct items like hardwood flooring (class 50) from hairdryers (class 100), while at the same time combining items with the same general characteristics, like shoes (class 150), for example, into one classification. This makes communication about the product much easier for both shippers and carriers. So instead of having to worry about what kind of shoes, what brand name or size you are shipping you just look for shoes. Easy, right?

Enough with other examples, you just need help finding the right class for your product! Not a problem –  there are a variety of resources available to you. You  could always start by calling us and we can assist you. If you’re the do-it-yourself type, you can check out the product list at NMFTA.org where you can buy a book or a subscription to their online product called ClassIT. Or, if you only have a few items, you can pay a small one-time fee and the National Motor Freight Transportation Association (NMFTA) will tell you the proper NMFC to use.

If you’re going to venture out on your own and try to find the right freight class for your product here are 3 helpful tips:

  1. Use density as a starting point.  Learn to calculate freight density to determine your classification range. You can find more  info here: Freight Density.
  2. Read the notes. Many items have notes that explain the specifics requirements for that class.
  3. There is only one correct item number for your product. If you get stuck, ask for help.

That’s enough about freight classification for now. More to come later so keep checking in with us. Happy shipping!


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The Partial Truckload Conundrum

Shippers face a conundrum with mid-sized shipments on a daily basis: To ship with a less than truckload or a full truckload carrier. Sometimes, the best choice is neither.

Partial truckload shipping is an under-utilized mode of transportation that avoids the cross-docking of LTL shipments and can lead to the big savings and fast transit times of full truckload shipping.

Not sure if your freight would make a good partial shipment? Keep the following characteristics of partial truckloads in mind.

Mid-Sized is the Right Size

Partial shipments are generally too large to move LTL but not large enough to fill an entire truckload trailer. Shipments that use less than 20 feet of trailer space and weigh less than 20,000 pounds make great partial shipments.

Delicate freight? No problem.

Customers who ship partial truckloads benefit from a dedicated trailer. Once a standard partial shipment is loaded onto a trailer, it stays on the same trailer until being delivered to its final destination. No LTL cross-docking, no need to determine LTL freight class, just a smooth ride from point A to B.

Exact Dimensions Are a Must

Carriers hauling partials search for multiple shipments in a logical geographical order to fill their trailer to the last inch. Before a carrier accepts a partial shipment, they’ll need the exact dimensions to ensure the freight will fit on the trailer.

Broad Dock Hours Go a Long Way

Partial carriers often have multiple pickups or deliveries to make in the same day, and arriving on time for appointments can be a challenge. The more flexible the shipper and consignee dock hours, the better the chance for your partial to be picked up and delivered in a timely manner.

Interested in getting a free Partial Truckload quote? Freightquote delivers hundreds of partial truckloads each month. Call your Account Representative or quote online today.

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How To Ship

Freightquote.com has now announced the arrival of their new how to ship section which encompasses loads of information about shipping, how to ship, and how to ship freight. It features detailed information about Bill of Ladings, Hazmat (Hazardous materials), shipping tips, freight class and freight density. These new pages have helped viewers gain a more understanding of freight and how to ship freight. Freightquote anticipates adding even more information to this section to better help their surfers and customer gain the knowledge they need to be experts in freight shipping.

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