Jul 27, 2023

Shippers and Truckers to Optimize Low Volume Contract Lanes

In the freight industry, shippers place a premium on reliability, productivity, and punctuality. These fundamental principles drive their pursuit of secure and steadfast routing guides, as any deviation from this standard can result in unanticipated setbacks and costs. Nonetheless, specific categories of cargo are more susceptible to experiencing disruptions in the supply chain.

A contract lane with low volume (LVCL) is characterized by a bidding process initiated by the shipper resulting in less than one shipment per week. Despite their size, these lanes are frequently disregarded, however, they can be immensely consequential to a shipper's profitability if not managed appropriately.

Well, not just the shippers but mainly each trucking company/fleet of trucks together with each truck driver working for them are also affected. 

It is advisable for shippers to exercise increased vigilance when dealing with LVCLs. This particular type of cargo is susceptible to fluctuations in market conditions, presenting a formidable challenge to conventional management strategies. Operating costs that include contract rates/contract market rates, spot rates/spot market rates, shipping costs, load boards, freight class, freight budget, freight rate, and freight contract, and freight volumes, also have an impact on any fluctuations.

Do you want to focus more on your daily operations? It is convenient and practical to be part of a Consortium/Third-Party Administrators (C/TPAs) like Labworks USA to manage all, or part, of an employer's DOT drug and alcohol testing program and other DOT or FMCSA compliance needs. THIS WILL YOU A LOT OF TIME AND RESOURCES that you can redirect on any unprecedented additional expenses. We perform tasks as agreed to by the employer to assist in implementing the drug and alcohol testing program and to help keep the employer compliant with the DOT/FMCSA Drug and Alcohol Testing rules and regulations.
We as a DOT Consortium can help you.

Insights from Top Freight Industry Companies

President George Abernathy of a freight procurement company has observed that LVCL freight is highly susceptible to market forces, making it a high-risk candidate for failure when subjected to routing guides.

This type of freight warrants a more effective solution than the current best practice approach.

In order to optimize the efficiency of Less-than-Vehicle-Load carriers (LVCLs), it is recommended that shippers establish direct communication channels with prospective carriers for their freight, thereby fostering robust partnerships and eliminating extant gaps in the supply chain.

According to Leto, freight movements are commonly undertaken by small carriers, i.e., firms operating with a fleet of 100 trucks or fewer.

However, these carriers are often deprived of access to such freight until a broker secures the award and subsequently sells it to them.

In order to expand the scope of their carriers, shippers ought to consider implementing advanced functionalities such as the "Book It Now" feature, which enables carriers to reserve bookings in an instant. They will have an instant overview of the shipping volume, costs for shippers, contract pricing, and time frame too. This would prove beneficial for both shippers and carriers/brokers, and therefore, should be considered a win-win situation.

The Need to Have a System

The presence of a well-established platform and a systematic approach to managing Less-than-Container Load (LVCL) shipments has been observed to significantly enhance routing guide adherence for shippers.

Consequently, such measures result in improved on-time service delivery for shippers and facilitate the selection of carriers who are competent and willing to transport this category of freight.

Freight procurement companies have streamlined the process for shippers to manage Less-than-Truckload shipments through its innovative dynamic Book It Now functionality.

This feature, which is a part of the company's spot automation suite, empowers shippers to access real-time market rates before establishing a minimum and maximum rate, thereby enabling carriers to reserve their spots with ease and efficiency.

As perthese companies' assertion, shippers are able to achieve a 100% tender acceptance rate from their existing carrier network, aided by the marketplace that boasts over 45,000 carriers. This translates into cost savings that were hitherto unavailable to them.

Furthermore, freight procurement companies boast effortless integration capabilities with the leading TMS platforms, providing an unparalleled level of convenience for seamless implementation.

They assert that LVCL should be conveniently accessible to the carriers that transport it, and emphasizes Emerge's dedication to discovering novel approaches to streamline the procurement procedure via direct shippers/carrier interaction. According to Leto, freight priced appropriately is easily useable by the majority of carriers responsible for moving LVCL throughout North America.

Quick Tip: Here's a list of DOT Consortium services we offer at Labworks USA with respective rates that can be your reference to have better expense projections.

Conclusion: The Path to Increased Efficiency and Profitability With Low Volume Contract Lanes

In conclusion, optimizing low-volume contract lanes is a crucial step toward achieving increased efficiency and profitability in the shipping and trucking industry. By strategically managing these lanes, both shippers and truckers can minimize empty miles, reduce costs, and maximize their operational resources.

For shippers, focusing on low-volume contract lanes allows them to streamline their transportation network by consolidating shipments and utilizing available capacity more effectively. This not only reduces transportation costs but also improves customer service by ensuring timely deliveries. Additionally, by working closely with carriers to negotiate favorable rates for these lanes, shippers can achieve significant cost savings.

On the other hand, truckers can benefit from optimizing low-volume contract lanes by minimizing deadhead miles – the distance traveled without a load. By carefully planning their routes and leveraging technology such as load-matching platforms or route optimization software, truckers can find backhaul opportunities or alternative freight options that align with their existing routes. This not only increases revenue potential but also reduces fuel consumption and wear-and-tear on vehicles.

Overall, embracing the path to increased efficiency and profitability through low-volume contract lanes requires collaboration between shippers and truckers. By jointly analyzing data, identifying synergies, and implementing effective strategies for lane optimization, both parties stand to gain substantial benefits in terms of cost savings, resource utilization improvements, and ultimately better business outcomes.

If you want to stay updated with the current trends in the trucking, freight, and logistics industry, stay connected to us.

More over, are you looking for a company to help you to stay DOT and FMCSA compliant? We at Labworks USA can support you.

If you are looking for more information about drug and alcohol testing as a truck driver, visit LabWorks USA. Our DOT Consortium's friendly team will be more than happy to discuss any concerns you may have and work with you to ensure you are always fully compliant specially with random DOT drug and alcohol testing pre-employment testing. Moreover, if you need help with FMCSA Clearinghouse registration, we can further support you.