Mitigating Recession-Altered Transportation Costs
Over the last five years, many temperature-controlled transportation companies have seen an increase in average load weight as well as a decreased number of loads shipped. This has impacted smaller carriers who struggle to survive. Rising transportation costs have increased the quantity of SKUs shipped per load well, in efforts to mitigate costs. However, for the mid-tier food supplier this is not always a feasible option. They may feel forced to ship in smaller lots (LTL), which creates a higher cost per pallet. In order to give the economic advantage back to the smaller refrigerated shipper, Hanson Logistics has created Velocities TM Multi-Vendor Consolidation (MVC) program. This allows many smaller companies to take advantage of the full truckload price by combining product lots with the same temperature requirements from multiple vendors who have all sold product to a single or low number of receivers.
As the country progresses through recovery and financial ability improves, the affordability of LTL shipping may come back into range for the mid-tier shipper. But the loss of many temperature-controlled carriers currently leaves the country with a combined capacity for the major carriers of approximately 10,500 tractors and 15,000 trailers at 3500 cubic feet of available space per 53 ft. trailer for national coverage. Additionally, the US Department of Transportation (US DOT) currently limits drivers to 11 hours of driving daily up to a maximum of 70 hours per week. Within each day’s driving, a 30-minute rest break and a 10-hour sleep period are required. Most major transporters limit the maximum speed of their trucks to 62 or 65 mph for fuel economy, allowing drivers to cover 500 to 550 miles per driving period. All this results in a shortage of capacity as the demand becomes greater. Hanson Transportation Management Service works hard to meet the needs of the mid-tier processor by offering consolidation plus national, regional and local distribution.