In this article, we’ll dive into less-than-truckload (LTL) industry trends to manage for 2022
The LTL market is revising in reaction to the essential change in how goods are shifting from production to the last-mile distribution to customers.
As a result of this, many shippers are modifying their approach from just-in-time inventory to just-in-case based on the hard lessons of the past two years.
While the LTL freight industry demand requirements change for a variety of reasons. The three of the ultimate factors that will be part of the day-to-day reality of LTL freight and some of the techniques that can help shippers guide rising costs and complexity in the supply chain. Labor deficiencies will have a lasting effect, effectively reducing capacity for carriers and terminals. Nowadays, the driver situation in LTL is not as crucial as the over-the-road market, primarily because LTL drivers can spend more time at home, but carriers still don’t have the drivers they need. Government and industry initiatives to attract more people to the trucking profession should help alleviate the situation in the long term. However, the driver shortage will still be a factor in the short term.
The accessorials can fastly raise LTL shipping costs as carriers levy fees for additional services like liftgate use and delivery/pickup appointments. In colder months, Protect From Freeze services could add cost to your rate and time to your transit, as carriers attempt to reroute equipment to protect freight from extreme temperatures. Monitoring your invoiced accessorials and surcharges will help identify freight optimization opportunities to reduce shipping costs significantly.
The accessorial/surcharge situation reflects carriers’ strategy to select freight that’s optimal for their network. Shippers with reasonable pickup and delivery requirements and freight that facilitates efficient space utilization will likely be able to secure capacity compared to those who don’t accommodate carriers’ priorities.
Many shippers in the retail space are shifting toward smaller, more frequent shipments for fulfillment and replenishment, but that takes planning and coordination to a higher level of complexity. Consolidating shipments to fit LTL networks can reduce costs compared to parcel shipments and offer more flexible service compared to truckload options.
As your organization defines its strategies for success this year, consider these factors to help weather the potential for disruption and position your supply chain for greater efficiency.