by Marketing | Aug 8, 2017 | News
Over the past few years, it has become increasingly difficult to secure truckload capacity. Currently, the overall trend in the logistics industry is that freight volume continues to increase, while truckload capacity cannot keep pace. In order to secure truckload capacity, you must understand the challenges associated with it which include truck driver shortages, increased regulations, and various economic factors.
Truck Driver Shortages
For several years running, driver shortages have been a consistent issue in the trucking industry. The two main factors that have led to a shortage in drivers include the number of drivers retiring and the amount of growth within the trucking industry. With the increasing number of drivers retiring, there is just not enough qualified applicants that can replace these jobs. The American Trucking Associations (ATA) estimates that by 2024, there will be a shortage of nearly 175,000 drivers. As the trend line for freight volume continues to increase, the number of drivers required simply can’t keep up.
Increased Government Regulation
As government regulations continue to increase, every business is affected in a unique way. Currently, CSA compliance, E-Logs, and Hours of Service regulations are affecting drivers and their availability. These regulations can be a burden to shippers because of the possibility of penalties, fees, and infractions if they are violated. Some infractions from government regulation can even revoke operating authority for freight carriers leading to an even larger shortage of drivers. Currently, the Electronic Logging Device (ELD) mandate is set to take effect this December. This regulation is causing major concern in the trucking industry and some carriers are even worried they may have to leave the industry or at the very least remove trucks from circulation.
Economic Factors
Not only is government regulation and driver shortages making it difficult to secure truckload capacity, but economic factors are also having an impact. A main concern in the industry right now is trucking equipment shortages. These shortages are due to the fact that economic pressure forced carriers into holding onto tractors and trailers longer than normal because these companies could not afford to replace them right away. Now that many carriers are in a position to replace old equipment, the demand for tractors and trailers has spiked while production has not. As a whole, truckload capacity is becoming harder and harder to secure because of factors such as this.
Securing truckload capacity can be very difficult and time-consuming due to the shortages, regulations, and economic factors affecting the trucking industry. Logistics Plus can help ensure you secure valuable truckload space. Contact us today!
by logisticsplus | Aug 7, 2017 | News
As a reminder, the recently approved National Motor Freight Classification (NMFC) freight classification changes went into effect this weekend (August 5th, 2017). These changes will have far-reaching effects on LTL shipments of certain commodities in the NMFC that are based on density ratings, such as Plastic or Rubber Articles, Expanded, NOI (157320), and others. Previously, most items assigned a class based on density were subject to one of two tables. The so-called 9-tier classification broke down density into 9 sub ratings as follows:
| Sub 1 |
Less than 1 |
400 |
| Sub 2 |
1 but less than 2 |
300 |
| Sub 3 |
2 but less than 4 |
250 |
| Sub 4 |
4 but less than 6 |
150 |
| Sub 5 |
6 but less than 8 |
125 |
| Sub 6 |
8 but less than 10 |
100 |
| Sub 7 |
10 but less than 12 |
92.5 |
| Sub 8 |
12 but less than 15 |
85 |
| Sub 9 |
15 or greater |
70 |
The 11-tier classification contained 11 density breakdowns:
| Sub 1 |
Less than 1 |
400 |
| Sub 2 |
1 but less than 2 |
300 |
| Sub 3 |
2 but less than 4 |
250 |
| Sub 4 |
4 but less than 6 |
150 |
| Sub 5 |
6 but less than 8 |
125 |
| Sub 6 |
8 but less than 10 |
100 |
| Sub 7 |
10 but less than 12 |
92.5 |
| Sub 8 |
12 but less than 15 |
85 |
| Sub 9 |
15 but less than 22.5 |
70 |
| Sub 10 |
22.5 but less than 30 |
65 |
| Sub 11 |
30 or greater |
60 |
Effective August 5th, the 9-tier breakdown will go away and NMFC items subject to it will be replaced by the 11 tier breakdown. This change is actually good news for shippers, as it provides for a lower class for shipments that are very dense, specifically over 22.5 lbs per cubic foot. The other change however is not so favorable. The 11-tier breakdown will change the sub 4 rating for articles that have a density of 4 but less than 6 pounds per cubic foot. Previously this was rated as a class 150, but will now be rated at a class 175:
For shippers whose LTL shipments were previously rated at class 150 based on density and will now be rated at class 175, this represents about a 15% increase in freight rates. For shippers with an FAK rating of 150, this should not change that rating, but items that were previously in the actual class range may now change. For example, if a shipper has a FAK class 100 rating on items with an actual class of 100-150, and they ship Plastic Articles with a density of 4-6 pcf, this shipment will no longer be subject to the FAK class 100 and will instead move at the actual class of 175.
Please contact your Logistics Plus North American Division (NAD) freight representative if you have any questions regarding the new rules.
by logisticsplus | Aug 4, 2017 | News
Thank you to the folks at Wonolo for including Logistics Plus in their “How to Recruit Top Manufacturing & Logistics Talent” blog post. This is obviously an important topic for Logistics Plus given the recent growth and expansion announcements, and our pursuit to find additional logistics talent to join our cool, global company. The full article can be viewed online, and the excerpt that includes comments from Scott Frederick, VP of marketing for Logistics Plus, can be viewed below.
Wonolo (stands for Work. Now. Locally.) is an on-demand staffing platform for businesses to fill their immediate hourly or daily labor needs. Wonolo solves the last mile staffing problem for FORTUNE 500 companies as well as small-to-medium businesses (think Coca-Cola merchandising, eCommerce fulfillment, event staffing, hotel housekeeping, etc). Wonolo allows companies to manage unpredictability by augmenting their existing labor force with hourly to daily Wonoloers who can work immediately and do the job. Visit them online at www.wonolo.com
by logisticsplus | Jul 28, 2017 | News
Thank you to the VoyageHouston staff for including Logistics Plus in their Houston’s Most Inspiring Stories collection. The Logistics Plus Houston office – one of over forty locations around the world – is located in the North Loop area of Houston. Port Houston is an important gateway for the Logistics Plus International and Project Cargo teams. Additionally, the Houston office plays a key role in our U.S./Mexico cross-border logistical activities. Since we are a rising star in the State of Texas, the folks at VoyageHouston were kind enough to interview Jim Berlin, founder and CEO of Logistics Plus. Here is a clipping of the interview and profile (click the image to go directly to the VoyageHouston website).
by logisticsplus | Jul 25, 2017 | News
Thank you to the folks at Customer Strategist journal for including Logistics Plus in their “Flat Can Be Good for Business” case study article by Cara Rosner in their latest issue. The full article can be viewed online, and the excerpt that includes comments from Jim Berlin, founder and CEO of Logistics Plus, can be viewed below.
Customer Strategist aims to provide executives with insight they can use to build more profitable customer relationships. The journal facilitates learning and action by presenting progressive thought leadership, consulting methodologies, and in-depth research on customer issues. Readers can harness the information to create a long-term, competitive advantage. Visit them online at www.customerstrategistjournal.com.
by logisticsplus | Jul 20, 2017 | News
Carrier liability and cargo insurance (also known as shippers’ interest) are often thought to be the same thing. Although they both involve certain coverage of freight, they have some key differences that are important to understand. Damaged and lost items are unfortunately a common problem when shipping freight. Because of this, it is crucial to know how to get the best coverage on all of your shipments. Here are some of the key differences between carrier liability and cargo insurance:
Carrier Liability
All freight shipments come with some sort of “limited liability coverage.” This coverage is determined by the carrier and varies depending on the commodity type or freight class of the goods being shipped. For the most part, carrier liability covers up to a certain dollar amount per pound of freight. It is not uncommon to find that the included liability coverage is less than the actual value of the goods being shipped. Also, if the freight is used and not directly from the manufacturer, the liability coverage will be significantly less than it would be for new goods. Furthermore, carrier liability has limitations in certain instances when the damage is due to an act of God (weather-related), or act of the shipper (improper packaging or loading). In these two cases, the carrier cannot be at fault.
Cargo Insurance
Shippers’ interest cargo insurance, also sometimes referred to as freight insurance or goods-in-transit insurance, is a great way to protect customers from lost or damaged freight while it is being transported. This insurance is an additional charge that is typically based on the value of the goods being shipped. As previously mentioned, carrier liability may only cover a certain dollar amount per pound of freight. When your freight has a higher value than what is covered by liability, cargo insurance may be very beneficial to you in order to better protect yourself from lost or damaged cargo. Another benefit of purchasing cargo insurance is that you do not need to prove the carrier was at fault for the lost or damaged items, only that the damage or loss actually occurred.
Differences in the Claims Process
If the shipment is only covered by carrier liability:
- The freight claim must be filed within 9 months of delivery
- If the delivery receipt isn’t noted as damaged some carriers require immediate notification
- Proof of value and proof of loss must be provided
- The carrier has 30 days to acknowledge the claim and must respond within 120 days
- You must prove carrier negligence (the freight was picked up in good order and packaged properly, but was delivered in a damaged condition)
If the shipment is covered by shippers’ interest cargo insurance:
- You must provide proof of value and proof of loss
- Claims are usually paid within 30 days
- You aren’t required to prove carrier negligence
Logistics Plus can help assist you in determining a carrier’s limited liability amount and deciding what coverage is best for your freight shipments. We also provide very affordable and comprehensive cargo insurance to shippers who need the added protection. Contact us today to learn more!
