3 things to consider before pursuing a drop trailer program.
April 26, 2016
In many circumstances, a drop trailer program creates efficiencies for all parties involved in moving freight. That includes shippers, consignees (receivers) and carriers. These programs can be individually tailored for all trailer types, but are primarily for dry vans, flatbeds and temperature controlled trailers. Here are three things to help you decide if drop trailers will benefit your business.
When you approach your freight service provider to discuss a drop trailer program, volume is likely the first point you will discuss. Carriers' are looking to maximize asset utilization. If the trailer is not moving they are not making money.
You don't have to be a mega shipper to take advantage of drop trailers. Most carriers are looking for a minimum of 2 shipments per week per lane in order to make it worth their while. Try bundling similar lanes together in order to create scale.
Different carriers will find certain lanes and shipment volume in those lanes attractive. Most carriers will prefer lanes based on their business needs. However, as a general rule of thumb, lanes which are desirable as live load/unload are usually wanted in the drop trailer space as well.
The industry has changed over the past 15 years. With freight volume showing no signs of slowing down, carriers are regionalizing to move shorter hauls that drive efficiency. That also creates more home time for their drivers, with the goal of less driver turnover. This shift enables you to capitalize when you have the lane density a carrier is looking for within a specific region.
In order to ensure optimal results from a drop trailer program, you must first identify what you are trying to accomplish. There are many reasons you may want to utilize a drop trailer program:
Alleviate loading dock congestion.
A dropped trailer essentially means additional space for you to work with. When you have a dropped trailer you can move freight off your dock when you need room in your warehouse.
It can be painful when your schedule is at the mercy of a truck's arrival. A dropped trailer means you can load freight at your pace and in your own time.
Work force scheduling.
If a truck pulls in to be loaded at 7 p.m., and no one is at your warehouse to load it, you could hurt your profits paying overtime to get the truck loaded. You could also lose money if you're billed for the truck's time in detention. That's not something you have to worry about when you have trailers dropped at your facility.
Become a shipper of choice.
Carriers like drop trailers as much as freight shippers when it makes sense. They help cut down on dwell time. The less time they have a truck and driver sitting, the better their asset utilization percentages become.
Every shipper has their own objectives with a drop trailer program. It is important to define yours so that you can choose the freight service provider that can help move your business forward.
It takes more than having volume and lane density to make a drop trailer program successful. The greatest results are realized when you work with a freight service provider that understands your business, aligns to your key performance indicators (KPIs) and reports back on them. Open communication, alignment of expectations and collaboration between you and your provider makes a drop trailer program a win for everybody involved.
Once you've determined you have the volume or can create scale, defined your goals and selected a freight service provider like Freightquote by C.H. Robinson that will collaborate with your business, you're ready to put the wheels in motion for a drop trailer program.
Image Credit: https://www.istockphoto.com/portfolio/ErikdeGraaf