5 tips for managing truckload shipping rates in 2019.
April 2, 2019
The truckload industry is facing rising rates in 2019 and moving freight is becoming costlier. According to Logistics Management, fuel prices, insurance costs and driver wages are a few of the most impactful contributing factors.
However, the prevailing thought is that countering rising truckload shipping rates by expanding your knowledge of the market through research and planning is the best option. After all, your freight needs to be shipped and finding a great rate isn’t a sure thing.
Preparing a strategy that puts you in control of your freight, while operating within a strict budget, has proven to be a challenge for shippers facing an everchanging market. Here at Freightquote by C.H. Robinson, we want to help you navigate the market.
Below, you will find our 5 tips for managing your freight while truckload shipping rates rise in 2019.
1. Do your research, and then do some more.
Shippers are coming off a year that featured fluctuating supply and demand due to unexpected developments and trends. Doing your research and preparing for what happens next is more important than ever. Your flexibility and success in the future is dependent upon your strategy and ability to plan today. Expanding your knowledge of what to expect and your ability to strategize on how to react accordingly is invaluable.
2. Understand what influences rate fluctuations.
Research will be the foundation for how you understand truckload rates and it will help you anticipate what’s coming next. Ultimately, supply and demand drives truckload shipping rates. The influential factors behind supply and demand for truckload shipping include, but aren’t limited to, seasonality, driver shortages/surpluses, economic strength, and several more. Understanding these factors and how they impact the industry as a whole will help you manage the risks that accompany pricing fluctuations.
3. Anticipate trends and react accordingly.
According to FreightWaves, demand is continuing to grow, although it’s growing at a slower rate than what we saw in the first half of 2018. When truckload capacity gets tight, for any reason, the rates will become volatile and you will need to be prepared. That’s where your research will come into play. Two seasons that you can count on having an impact on your rates are:
- Retail season (October - December)
- Produce season (April - June)
Peak seasons like these are instrumental in leading to an imbalance of supply and demand. This imbalance will cause rates to shift up/down depending on geographical conditions of your freight. Having a plan and knowing when to implement that plan will enable you to make proactive choices, like maximizing lead times and gaining flexibility on pickup/delivery dates. This is instead of making reactive choices after your costs have risen and your shipments have failed. Truckload shipping is all about staying (at least) one step ahead of the trends that will have a lasting impact on your efficiency and effectiveness.
4. Build a consistent shipping schedule.
Building a schedule ahead of time will help you determine where the gaps in your shipping strategy exist. Your schedule can be used to guide the decisions you make over the next six months, the next year and beyond. However, that doesn’t mean you can’t stray away from the schedule if the market is pushing you in another direction.
Use it as a guide to help with mapping out and anticipating the peaks and valleys of supply and demand in your lane(s), so you can react with purpose and adjust as needed. Doing so will help you gain visibility into what is driving changing rates, and it will help project your costs.
Another angle to consider here is locking in rates when you enter into a shipping contract, as a way to protect against seasonal spikes. A contract is an agreement between the business and the provider that sets an expected rate for shipping, duration of the relationship and volume that will be handled between the provider and the business. You can help limit any budgetary concerns by taking this route.
5. Find the best freight provider that fits your needs.
Developing a strong understanding of what really is the best provider for you can be a challenge in itself. After all, there are so many options. If you are looking to book a shipment, of course you are going to want to employ a provider that fits your needs. It’s not that easy though. We understand that hiring a truckload provider requires more than scheduling a pickup time, loading freight into a trailer and expecting everything else to work out. That’s why we’re dedicated to helping you find competitive freight rates.
As we work through 2019 and leave 2018 in the rearview, it’s important to carry those lessons with you and leverage them to make better decisions in the future. Freightquote offers powerful, self-service tools that will help make rising rates a little less frightful while the market goes through expected, and unexpected changes over the course of the next year. Managing the risk of rising truckload shipping rates might be intimidating, but we hope that our 5 tips will help you along the way.
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