3 Ways LTL Carriers Can Rebalance Their Network and Achieve Procurement Savings

January 23, 2020

 

Coyote has maintained relationships with a diverse network of less than truckload (LTL) carriers for years, so we know how challenging it can be for them to keep costs down while servicing increased customer demands. 

To help, Nick Shroeger, Chief Network Strategy Officer, is sharing a few added value solutions to help your fleet navigate today’s challenging market.

 

I don’t need to tell you that it’s a tough time to be a LTL freight carrier. Carrier appointment windows are shrinking, shipping volumes at docks are increasing and it’s getting more difficult to keep your trucks filled.

To further understand the rising challenges you’re facing, Coyote partnered with Martec, a third-party research firm, to dive deeper into what carriers and shippers are really up against today.

According to hundreds of supply chain professionals ‘Keeping up with customer / industry demands (better, faster, cheaper)’, ‘Keeping transportation costs down’ and ‘Sourcing consistent capacity’ were three of the top challenges faced by shippers.

And the smaller the shipper organization, the more acutely they feel those pressures.

“Given today’s complex market, our clients’ expectations are evolving, so to keep our relationships strong we need new solutions.”

- Jonathan Fischer, Northstar Recycling

 

Just as shippers like Jonathan are looking to keep up with today’s complex market, these pressures are being pushed down onto their suppliers — including LTL carriers — who must adapt to provide better, faster and more innovative solutions.

In the same survey, Coyote asked hundreds of carriers who also cited ‘Keeping up with customer/industry demands’, ‘Keeping maintenance and operational costs down’ and ‘Sourcing consistent freight’ as top challenges, followed by ‘Changing Government Regulations’ and ‘Investing in New Technology.’

 

 

While smaller shippers struggled most with managing this demand, it’s the larger shippers (like many LTL carriers) who feel the pressures of demands and operational costs the most.

These challenges likely ring true to many of you. But what do you do about addressing cost savings, rising demand pressures and utilization if you’re a LTL carrier?

You rethink how you operate your network to drive greater efficiencies. Specifically, there are three value add services that your 3PL provider, such as Coyote, can help create for you in order to address these challenges.

These are services that my team is directly responsible for helping to customize and create for our carriers and shippers – each providing real, measurable improvements.

 

1. Purchased Transportation Solutions for Procurement Savings

LTL fleets can leverage their 3PL provider’s larger network, partnerships and experienced operations teams to improve your network balance and service levels while reducing outsourced transportation expenses.

 

You can do that by working together to identify capacity solutions such as:

  • Dedicated “scheduled” linehaul
  • Transactional “ad hoc” linehaul
  • Month end / project support
  • Peak season support

 

Additionally, your provider can help your fleet create equipment solutions such as:

  • Dedicated supplier drop equipment
  • Leased trailers
  • LTL provider equipment (power only)

 

Coyote’s Power Only Program

Deployed first power only leased trailer solution in 2016

Over a dozen active program partners including UPS, XPO, SAIA, Estes, Southeastern,

Forward Air and more

Operational support staffed 24/7

 

In 2018 we worked with 15 active LTL carriers to create over 78,000 linehaul opportunities. These opportunities not only resulted in a 98.96% on-time delivery performance — they also helped yield cost reductions and improve network balance.

 

 

Round-trip continuous moves can also lead to procurement savings by overlaying multiple customer networks. This solution matches one-way moves across networks to create an asset round-trip continuous move at fixed costs, which can help to eliminate market price variability.

 

2. Asset Utilization to Fill Empty Miles

I touched briefly on the cost saving benefits of overlaying network. Another advantage of working with your 3PL provider to overlay multiple customers networks is the ability to better utilize your assets, thus reducing non-revenue generating (or empty) miles.

The key to this is to match empty fleet lanes with customer freight through a detailed network overlay process in order to target underutilized or empty assets.

 

Example (In-route match):

Driver departs Nashville, TN with a loaded trailer destined for Knoxville, TN

Coyote customer loads in Crossville, TN destined for Lebanon, TN

Driver drops loaded trailer in Knoxville, TN and picks up empty

Driver deadheads to Coyote customer to make pickup

Driver picks up Coyote load and delivers to Coyote customer

Driver returns to hub to final and reset

 

For example, in one year, three active LTL carriers were able to fill 60 empty legs per day – leading to over 1 MILLION empty miles eliminated.

Not only is this reducing purchased transportation costs, but it’s improving driver utilization, creating incremental revenue and reducing empty miles within your network.

 

3. Rebalancing Your Network to Build Density

Does your network experience trailer surplus and deficit locations throughout the year? Tired of spending your hard-earned money and precious time to do it?

This can be a common LTL carrier problem, but one that is solvable by allowing the right 3PL provider to help. By leveraging a variety of solutions, you can reposition trailers and rebalance your network with:

  • Modal conversions
  • Local Cartage Moves
  • Tow away and load out solutions
  • Available trailer pools to feed deficit locations

 

Tow Away

Load Out

  • Best option for time sensitive moves
  • Less likely for unit to incur damage in transit
  • More expensive than Load Out moves
  • Best option when delivery date is flexible
  • More likely for unit to incur damage in transit
  • Cheaper than Tow Away moves

 

In one year, Coyote worked with 30 active LTL carriers/customers to rebalance over 55,000 trailers. This helped to create quick same-day capacity, reduce cost, enable special projects (through trailer pool setups) and create more new equipment pickups and deliveries.

To recap, in the face of mounting challenges including higher, more unpredictable costs, increasing customer demands and the ability keep your trucks filled – look to your third-party logistics providers to help provide added value solutions.

From dynamic routing to linehaul opportunities, speak to experts about ways to customize solutions to address your fleet’s unique challenges.

 

Coyote for LTL Value Added Network Solutions

My team is always happy to consult with LTL carriers on new ways of working together and we encourage you to think outside the box with us.

Our goal is to transform the supply chain industry with innovative solutions that solve existing problems for both carriers and shippers.

We accomplish this by understanding industry trends, leveraging existing networks and empowering our people to build solutions customized to your business.

 

Interested in learning more about how Coyote can help you?

TALK TO A SPECIALIST

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