Trucking

Truck Tonnage is Up1

Compared to this time last year, truck tonnage is up over 2.5%. “Demand for trucking freight services remains strong, but for-hire contract carriers are capacity constrained due to the driver and equipment markets. The spot market has been surging as these carriers can’t haul all of the freight they are asked to move,” said Bob Costello, ATA’s chief economist. “So the fact that the tonnage index hasn’t fully recovered is a supply problem, not a lack of demand.”

In fact, demand has been on the rise since the beginning of 2021. According to the National Retail Federation, retail sales are expected to continue to rise in 2022. “NRF expects retail sales to increase in 2022, as consumers are ready to spend and have the resources to do so,” NRF CEO Matthew Shay said. “We should see durable growth this year given consumer confidence to continue this expansion, notwithstanding risks related to inflation, COVID-19 and geopolitical threats.”

Even though the expected growth rate for 2022 is lower than the 14% annual growth rate we saw in 2021, it is stronger than the 10-year, pre-COVID-19 pandemic growth rate of 3.7%.

 

Women in Logistics2

Many women are taking advantage of the opportunity to work in the logistics industry and contribute to a field that is often considered the backbone of American society. However, women’s presence in the industry is still lacking. In fact, men make up about 90% of the driving and warehouse positions and 70-80% of the positions in the 3PL space.

Are we lacking women in logistics? If so, we’ve come a long way, but what else can we do? How can we attract female talent to the industry? The TIA’s Women in Logistics (WIL) committee has a few plans in this regard, including speaking to high school and college-age students to introduce an industry they might not have ever considered.

 

Save Money with Expedited Shipping3

As shipping delays and supply chain issues continue to disrupt the logistics industry, a huge issue businesses are struggling with is shipping and receiving products on time. These disruptions can cause companies to miss deadlines, leading to the loss of valuable customers and vendors.

However, expedited shipping services can help mitigate these issues and save you money in the long run. Westgate has almost 40 years of experience as a freight broker. We can identify the quickest and most cost-effective transportation methods while also helping to prevent financial loss caused by absent or late shipments.

When you partner with Westgate, we save your account information, needs, and special requests in our customer database. That means that every time you ship with us, you’ll spend less time explaining your situation, getting your inventory on the road and on its way even faster.

 

When you have goods that need to be delivered, there’s no time to waste. LEARN MORE today to find out how we can help you with your shipping needs. CONTACT US today to request a quote!

Less than truck load (LTL) shipping can be an extremely efficient way to move shipments when you don’t need to fill an entire trailer.

 

However, if the LTL shipping process is not implemented well, it can have some potential disadvantages, costing the company more time and money than necessary.

In order to ship smarter, a shipper needs to know how to get the most benefit for the cheapest price. Understanding common LTL shipping mistakes makes it much easier to avoid these issues. LTL shipping is a growing side of the freight industry and shippers need to know these common pitfalls in order to avoid a potentially costly shipping mistake.

 

Here are some ways to avoid common LTL shipping mistakes you could be making that hinder productivity and negatively impact the bottom line…

1] Know your dock delivery set up to plan for additional services needed.

2] Include proper labeling and documentation.

3] Train employees in OSHA regulations and the risks associated with not following them.

4] Provide correct load dimensions.

5] Provide accurate class designations.

6] Use the right equipment to weigh the freight correctly.

 

If you’re tired of dealing with the frustration that comes with shipping via LTL carriers, working with an experienced 3PL to manage your less than truckload shipping tasks is a smart idea that can save you a tremendous amount of money.

For more packing tips and tricks, download our free Freight Pallet Packing Guide HERE.

CONTACT Westgate today to speak with a shipping specialist about how to make your shipping more efficient!

Prior to the Covid pandemic, less than 50% of the population had any knowledge regarding supply chain issues.

Today, over 90% are aware of supply chain issues and the impacts they have on our everyday lives.

 

There continues to be significant congestion of ships and an overwhelming shortage of container equipment in addition to staffing problems at the ports. In order to abate anxiety among the general public, container vessels must now anchor at least 50 miles from the Ports of LA and Long Beach until they are called in for offloading. Out of sight, out of mind.  Although unpredictable, capacity and supply will eventually return, which will cause rates to level off somewhat.

Shippers who negotiated contracts early in 2021 will experience the highest rate increases in 2022. Early negotiation created a buffer for the price increases that developed throughout the year. Those shippers may experience rate increases as high as 20%.

While all shippers are interested in transit time, the primary concerns are occurring at the point of origin. It is vital for shippers to get products off their docks, opening floor space and providing the opportunity to invoice their customers. Transit time has become a secondary concern. Unfortunately, we will continue to experience a degradation of service throughout 2022.

It’s nearly impossible to have a lean operation without a predictable supply chain. Shippers must reassess what they consider to be safe inventory levels to meet production goals and may be forced to consider additional warehousing when necessary. Lean and just in time (JIT) inventories must be closely monitored and risk assessments should be performed regularly when permitting vendors to maintain stock.

Carriers have been working around the clock to keep up with the influx of freight. It all begins and ends with drivers. Both shippers and carriers need to work together to make the truck driving profession more appealing. The current commercial truck driver market consists of 92% men and 8% women, with the average age around 49 years old. A campaign to lower the age requirement to 18 years old as well as add more women to the driver pool appears to be a necessity. Despite driver pay increasing by as much as 25%, attracting more drivers has continued to be a challenge.  Carriers have also reported that many current drivers have opted to work shorter hours in response to their increases in pay.

Many carriers are transitioning to target pricing, which is essentially identifying “good freight” versus “bad freight”. For example: How easy are the customers to work with? Which shippers load and unload quickly? How far out of route do they have to travel to their next pickup? etc. The pricing carriers quote will reflect their assumption on what freight works and what freight does not work in their systems.

The overall cost of trucking will remain high considering the elevated costs they are facing. In addition to the rising costs of fuel, equipment and insurance, LTL carriers are forced to use outside TL carriers to supplement their linehaul service.

Keep an eye out for another potential Black Swan Event. The ILWU has threatened a strike in July. While in the past they were agreeable to automation, they are now opposed and that has become a major sticking point in contract negotiations

 

WHAT IS A SHIPPER TO DO?
  • Become a strategic shipper.
  • Limit the dwell time carriers experience on the docks.
  • Make it as easy as possible for carriers to pick up and deliver.
  • Turn containers and trailers around quickly.
  • Provide a desirable environment for drivers.
  • Share important information.
  • Put yourself in the driver’s shoes with regard to your dock processes.

 

If you’re interested in improving your supply chain or reducing your freight costs… CALL WESTGATE GLOBAL LOGISTICS

610-866-8001

 

 

 

 

Currently, there are an incredible number of container ships waiting to be unloaded at the Ports of LA and Long Beach. To add to the congestion, there are more ships en route. Since these two ports account for the nation’s largest trans-shipment centers, this provides insight into the trouble we face going forward.  The sad truth is that the U.S. doesn’t have the infrastructure to handle the tremendous flow of containers headed for our country. Clearing the backlog could take us into Q3 or Q4 of 2022.

A view of the parcel side is equally dismal. UPS and FedEx have more freight than they know what to do with as we enter Q4 of 2021 and approach the holiday shipping surge. Expect the parcel carriers to utilize and initiate accessorial charges to offset their increased costs. Moreover, expect transit time to suffer.

The LTL and Truckload sectors are having similar issues. In addition to their struggle to find drivers and dock workers, these carriers are unable to obtain enough equipment to service their current volume. Shippers are not releasing trailers fast enough and storage trailers are in extremely high demand which has created a significant trailer shortage. Meanwhile, manufactures of tractors and trailers are having difficulty fulfilling orders for new equipment. COVID shortages are only making this matter worse.

What to expect for 2022? Without question, HIGHER RATES.

How can a shipper combat these dire problems? Focus on internal processes, watch for opportunities to consolidate shipments and work closely with vendors regarding product availability and scheduling.

Most importantly, call the professionals at Westgate Global Logistics to help minimize the impact of a difficult market.

800-637-8001

The COVID-19 pandemic completely turned the American economy, businesses, and the political world on its head. Because of this, 2020 was the first year that the TIA held the Policy Forum virtually, using Zoom to facilitate meetings between Members of Congress and the forum participants.

 

Even with the virtual adaptation, it was considered a great success for having enlisted ten sponsors (five from each political party) for the Motor Carrier Safety Selection Standard Act. “This success was a direct result of your grassroots efforts and direct lobbying. The fact is your voice is the most prominent and meaningful for a Member of Congress and their legislative priorities,” said TIA.

The TIA wanted “to build upon that success of getting back to the basics of grassroots advocacy efforts” with this year’s 3PL Policy Forum. The hybrid event, which was held on September 28th and 29th, featured both in-person and virtual registration options.

This year’s forum made more time for TIA Members to be able to meet with their entire Congressional delegation in order to present questions and comments, as well as ongoing high-level briefings from key officials from the Federal Motor Carrier Safety Administration (FMCSA).

“I never miss this chance to speak on behalf of our industry about the issues the industry faces — now and in the future. The more we get in front of these people, the more we can guide the narrative about our industry and steer regulation to help us all,” Mark Fiorini, president of Westgate Global Logistics.

Mark is dedicated to constantly improving processes for the industry as a whole. “The Policy Forum provides people and businesses an opportunity to sit down with the people who make decisions about our industry, and all of us here at Westgate strive to be at the forefront of these policy changes and trends.”

TIA plans to continue to focus their energy and dedication to 3PL advocacy efforts moving forward, and Westgate will be directly in their wake making moves for a better tomorrow.

 

CONTACT US today to experience our dedication to best shipping practices.

Temperatures and Freight Costs Are on the Rise This Summer

 

According to data provided by Cass Information Systems (NASDAQ: CASS), freight costs saw a surge in June and are expected to continue to rise moving forward.

The expenditures component of the Cass Freight Index increased 56.4% year-over-year and was 11% higher than in May. In fact, compared to 2019, the expenditures index was up 27.9%

The difference in the year-over-year numbers has been greatly affected by a steep drop in demand due to world-wide COVID-related lockdowns during the same period in 2020. This trend of increasing rates will likely continue due to the widespread lack of drivers, warehouse space, and equipment like trucks and containers.

“Tougher comparisons in the coming months will naturally slow these year-over-year increases, but extraordinary growth rates will continue in the near term, driven by increases in both shipment volumes and freight rates,” Tim Denoyer of ACT Research explained.1

Many industry experts expect the capacity constraints to ease up in the near future as the driver employment rate increases in response to higher pay which should, in turn, change the trajectory of truckload rates.

“Even with material supply constraints, the freight cycle remains in high-growth mode, benefiting from a strong retail economy, tight inventories, and a persistent backlog of container ships anchored in the San Pedro Bay,” Denoyer said. He believes the industrial sector will begin to catch up to broader demand as “record capital goods demand and likely infrastructure programs” play out. 1

The current capacity backdrop could begin to loosen as transportation payrolls expand and extended unemployment benefits have already expired in some states. Additionally, waning stimulus payments and supply constraints (drivers, trailers, and chassis) are weighing on volumes.

Though 2020 was marked by low levels of supply and exceptionally high demand, these levels will not last indefinitely. As they say, the cure for high prices is high prices; the market will eventually correct itself.

 

 

Becoming a Truck Driver Looks Good Through Higher Pay Tinted Glasses…

 

Driver recruitment and retention remains the top priority throughout the trucking industry.

It’s estimated that more than 200,000 qualified CDL holders are not currently working due not only to the COVID-19 pandemic, but also increased compliance with the Drug & Alcohol Clearinghouse. Diminished driver school graduation rates, early retirements, and more than 75,000 Clearinghouse violations are also some factors for the reduced number of drivers.

Data shows that driver hiring conditions are getting better, according to Tulsa, Oklahoma-based software-as-a-service provider Tenstreet. A recent report from the company that helps carriers better recruit and onboard drivers noted a “positive driver hiring outlook on the horizon.”

There has been a “slow but steady climb back to January levels” the data shows, with the number of drivers filling out job lead forms and applications continuing to move higher. January is usually a busy month for activity as drivers tend to inquire about changing fleets or jobs at the beginning of each year.

“Overall, we’re starting to see the same general seasonal trend lines the trucking industry is used to, with applications taking a hopeful turn upward in May, which will ideally mirror 2019’s trend of an increase in applications over the summer and into the fall,” the report read.2

A press release cited support from customers and their understanding of “the growing needs of the market” as a catalyst for the pay raise.

 

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

SOURCES:
1. https://www.freightwaves.com/news/freight-costs-see-june-surge-tougher-comps-coming</a>
2. https://www.freightwaves.com/news/driver-employment-market-may-be-improving-amid-historic-pay-increases

 

Like many industries, the United States truckload capacity market moves in cycles of supply and demand, supply being the number of trucks and drivers that haul freight and demand being the demand for those trucks to meet the needs of the current market.

 

For shippers and brokers, the cyclical rise and fall feels perhaps even more exaggerated in recent memory, given the current COVID-19. In fact, at the end of Q4 in 2019, capacity started becoming tighter than anything we’ve seen before. And now that the economy is rebounding and business is booming for many industries, freight demand is gaining momentum. With an increase in consumer spending and difficulties in finding enough drivers, the capacity squeeze continues.

Another factor in the tight capacity is the low supply of available warehouse space caused by consumers spending on physical goods and companies holding more inventory. A report from CBRE states that we will see an increase to 26% of retail sales by 2025 in the U.S. and globally we will need an increase of 1.5 billion square feet to keep up with a $1.5 trillion uptick in e-commerce sales.

Imported cargo shipments to the U.S. are expected to remain at a record or near-record levels for several more months as consumer spending continues to restart the pandemic-damaged economy. But economists and other experts say that all of that buying is clogging an already overtaxed supply chain.

“I see the back half of the year remaining strong,” Port of Los Angeles Executive Director Gene Seroka said. “The peak season starts for us on August 1st for our back-to-school specials, fall fashions, and then the holidays. But we have to hustle; we still have some cargo in the back lot to clean up before we pivot to peak season.” The Port of Los Angeles reported five months into the year, overall cargo volume is 4,551,445 TEUs, an increase of 48.2% compared to 2020.

“Supply chains are finding it difficult to keep up with demand as shipping capacity struggles,” Hackett Associates founder Ben Hackett said. “A number of vessels taken out of service when volumes were low remain in dry dock while others are delayed in congested ports, which face a lack of manpower both because of COVID-19 illnesses and the tight labor market.

 

A Busy Rest of 2021 Ahead

As we move into a busy fall season and then into the holidays at the end of the year we could face more challenges. Some industries are seeing their defined peak seasons disappear as the e-commerce boom has caused them to have year-round demand. But, we will still see some seasonal increases in an already tight environment.

If the last two years have taught us anything, it is to expect the unexpected! Proper planning and working with trusted logistics partners can help ease any burdens we may face in the rest of the year.

 

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

 

With 2021 well under way, the logistics industry is off to a solid start and top analysts are optimistic that the transportation industry will remain steady this year.

 

The U.S. economy is predicted to be in store for record-breaking GDP growth. Goldman Sachs raised its forecast for 2021 US gross-domestic-product growth to 6.8% from 6.6% because of the expected larger coronavirus relief package. This will be a large increase especially following the anemic year we had in 2020. The US economy contracted 3.5 percent on an annual basis in 2020, the largest contraction for any full year since the demobilization from World War II in 1946. However, disposable personal income (which subtracts taxes paid and adds government benefits received) experienced the fastest annual growth since 1984 contributing to the increase in purchasing of goods in 2020.

Amid the COVID-19 pandemic in 2020, truckers did an extraordinary job supporting the US economy. The trucking industry’s response to the COVID-19 pandemic created and flood of support for drivers and greatly improved public opinion of the industry as a whole. “Consumers have witnessed now firsthand what we do all the time. Unfortunately, it takes a worldwide pandemic for that to come to the surface, but the recognition is so well-earned and deserved…” said American Trucking Associations President Chris Spear, “2020 was a very defining year for trucking.”

Online shopping was already increasing in popularity, and shoppers being isolated indoors since March of 2020 has only accelerated that shift. “For the last four years, e-commerce growth has averaged between 13% to 17% increase, and last year it was up 14.7%,” says Ron Sides, Deloitte’s vice chairman and U.S. leader retail and distribution. “This year it will go ballistic, somewhere around 25% and it may go higher” bringing last-mile delivery up to unprecedented levels.

The medical transport sector is also geared to sky rocket, though much depends on the vaccine and how fast it is distributed to the general population. American Trucking Associations Chief Economist Bob Costello said, “the vaccine will help return to ‘normal,’ which means sectors that are currently hurting — like services and manufacturing — can bounce back, leading to more freight.”

Fortunately for truckers, pay increases should continue through 2021 as capacity continues to tighten and fleets are forced to compete for drivers. As companies increase driver pay to attract new drivers, it forces others to do the same to remain competitive.

 

We haven’t missed a beat. See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends.

 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

Sources:
https://www.piie.com/blogs/realtime-economic-issues-watch/what-us-gdp-data-tell-us-about-2020
https://www.ttnews.com/articles/trucking-industry-experts-optimistic-about-2021-once-covid-over

 

Many company owners don’t realize that the greatest unforeseen cost in shipping are accessorial charges.

 

Accessorial fees, or surcharges, are common with many major carriers. That includes surcharges for residential deliveries, deliveries outside major areas, oversized packages, parcels not in corrugated boxes, fuel, additional handling cost, and others. “Accessorials can add as much as 30% spend with carriers,” said Robert Martinez, founder and co-CEO of Shipware, a consulting firm working with shippers to reduce parcel and LTL spend. “Each needs to be measured, understood, and benchmarked before asking for concessions.”

Most come as a surprise when the freight bill arrives. These are charges that carriers apply to the freight bill for services beyond normal freight costs. They are generally applied after the shipment has been delivered. These costs are difficult to forecast, and recent heightened capacity can really drive up these additional fees if you aren’t carefully checking for them.

The best way to avoid these additional costs is to understand what they are and what you must do to avoid them.

Common Truckload Costs

  • Detention / Layover / Demurrage
  • Additional Stops / Diversion Miles / Circuitous Miles
  • Driver Assist / Count / Clean / Sort & Segregate
  • Hazardous Materials
  • Liftgate
  • Limited Access Fee
  • Pallet Jacket / Shrinkwrap
  • Redelivery
  • After-hours Delivery
  • Non-dock Delivery
  • Residential
  • Scale
  • Deadhead
  • Tolls / Border Crossing
  • Truck Ordered but Not Used

 

Common LTL Costs

  • Advanced Notification
  • BOL Correction
  • Liftgate
  • Detention Charges
  • Oversize / Overlength
  • Reclassification /Reweigh
  • Redelivery
  • Tolls / Border Crossing

 

In some cases, carriers introduce these charges temporarily but they become permanent, like the fuel charges.

“Fuel costs are way down from where they were in 2008 to 2010, but the charges never went away,” said Joel Dunkel, president of Parcel Forum trade show. While COVID-19 surcharges are new, it’s impossible to know whether they will become permanent, he said.

The Surface Transportation Board (STB) decision on demurrage and accessorial costs are part of a wider effort to “promote transparency, timeliness and mutual accountability by rail carriers and the shippers and receivers they serve.” The STB also clarified that the party responsible for demurrage should be the one in the best position to expedite the loading or unloading of railcars. “The intent is to ensure that the recipients of demurrage invoices will be provided sufficient information to readily assess the validity of those charges without having to undertake an unreasonable effort to gather information,” said the board.

Common Intermodal Costs

  • Detention/ Demurrage / Per Diem
  • Overweight
  • Rework

 

Since many of these extra fees are self-explanatory, most can be avoided by establishing a process that starts when the order is entered into your system.

 

Understanding conditions where the shipment will be unloaded is helpful: 

  • Does the site have a standard dock?
  • What type of equipment is used for unloading?
  • Are Lumpers used to unload? How are the Lumpers paid?
  • What are the receiving hours?
  • Are appointment times required?

 

Shipping department procedures are important and should be reviewed. Packaging is important and impacts pricing. The way boxes are placed on a pallet and the way boxes are labeled are important to many customers. Shippers must be careful to follow their customers guidelines.  Shipments might be refused or require rework. All at additional cost.

Shipping departments must use the correct classification on the Bill of Lading and enter the correct weight. Most LTL carriers have scanners to validate the size and weight of shipments. If a delivery cannot be made for some reason, the shipment could be subject to charges for storage, re-delivery, or return. Accessorial charges create a revenue opportunity for carriers and they have become very good at spotting those opportunities.

Westgate Global Logistics can help you identify and avoid these additional costs. CONTACT US to review how our services can help your business.

­­This peak season may seem out of the ordinary because of the pandemic, but the trends in increased e-commerce are most likely here to stay. Even though 61% of shoppers felt safe going to the store for holiday shopping, many brick and mortar stores have closed and may not ever open again.

 

Online shopping was already increasing in popularity, and shoppers being isolated indoors since March has only accelerated that shift. “It’s amazing how e-commerce has converted buying habits for so many people who previously preferred traditional brick and mortar stores,” says Mark Fiorini, President of Westgate Global Logistics, “They were forced into online purchasing initially earlier this year but now it seems they realize all the benefits and have converted their behavior.” With more people staying at home, having packages of groceries, clothing, and household items show up at their door is seductively easier than taking a trip to fight crowds and lines at the grocery store or mall.

Predictions from both Forrester and Deloitte say that online shopping will boom in the holiday season. “For the last four years, e-commerce growth has averaged between 13% to 17% increase, and last year it was up 14.7%,” says Ron Sides, Deloitte’s vice chairman and U.S. leader retail and distribution, “This year it will go ballistic, somewhere around 25% and it may go higher.”

As a result of this boom, transportation capacity has been tight with inventories running low at many places. At the same time, the boom in e-commerce is good for the trucking industry when it can keep up, particularly if companies are connected to order fulfillment. There are more LTL and final mile shipping needs with a high demand for at-home delivery. While LTL has risen, the truck volumes will most likely stay consistent, with the length of hauls and types of shipments changing. Couriers or ride-share type shipments are being seen as innovation in new services, where e-commerce middleman warehouses do order fulfillment and distribution. Because of the increased demand for goods, spot rates were up 10% year over year in July and have continued to trend upward, according to DAT. The current rebound could be a result of suppliers catching up to pent up demand.

The normal holiday shipping surge on top of an already tight capacity market has been challenging for many supply chains. Companies are scrambling to re-evaluate the resilience of their supply chains, looking for more transparency in their value chain, and diversifying the sources of their products so they can shift more easily when hit by a disaster.

When the pandemic shifted purchasing habits to be online, shipping patterns changed. The Resilience360 and Business Continuity Institute survey found almost 15% of shippers had seen their ocean transport significantly affected by the pandemic. The drop in in-store shopping severely disrupted east-west shipping routes, and put pressure on the ships delivering goods to the west.

But now that people are used to ordering more online, the trend may continue even after the pandemic is over. “E-commerce is likely to slow once social distancing is lifted,” said Bob Costello, chief economist at American Trucking Associations. “However, I suspect that some of the market share gains that e-commerce grabbed will remain with e-commerce.”

 

 

SOURCES:
https://apnews.com/press-release/business-wire/b6847791fbed49af98a47d1dcd6293a7
https://www.ttnews.com/articles/e-commerce-spike-likely-outlast-covid-19-pandemic-experts-say
https://abc7news.com/holiday-shopping-covid-19-delivery-delays-online/7365574/
https://www.forbes.com/sites/pamdanziger/2020/09/27/e-commerce-will-explode-this-holiday-and-put-retailers-online-strategies-to-the-test/?sh=2212e1962f18
https://www.supplychaindive.com/news/pandemic-peak-freight-ocean-airfreight-truck-railroad-rates/582718/
https://www.ft.com/video/4a7e38ee-0ca3-47b9-aabf-9afd6a185d19
https://hbr.org/2020/09/global-supply-chains-in-a-post-pandemic-world
https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/