The “True Cost” of Logistics
You have shopped around and found trucking rates that were $800-$1200 less than other logistics companies. That was 4-weeks ago and today your load is still sitting at the shipper’s location waiting for pickup. Does this sound familiar? In logistics, there is the price quoted and the true cost of moving material.
Being Picked Last In Gym Class
Some brokers and companies will offer lower rates to “take the load off the street.” Simply put, this is the practice of removing a load from the available list by cutting the shipping rate. It is easy to get hung up on a low freight price and forget the variables in transportation. The actual true shipping rate on any given week based on:
- Regional Truck Inventory
- Equipment Requirements (van, flatbed, or tanker)
- Preferred Routes (backhaul capabilities)
- Fuel Surcharge (FSC)
- Transloading or Cross-Decking
Now add in the independent truck drivers “free-will” to take the load. This is based largely on the money the driver keeps per mile. Your load was spoken for and taken off the load boards, yet it sits waiting until it becomes desirable; in other words, until the better loads are gone. It is like being picked last in gym class!
The True Cost
Time is money in business, but never so much as during the past year and the pandemic. Businesses have cut lead-times to better control and reduce inventory levels. While this is helping the bottom line, the cost of a load sitting for days, weeks, or longer could end up hurting the business. The true cost includes lost sales, lost production time, and job delays. In many cases, loads that cannot be moved promptly need to be reassigned and expedited. The cost of expediting freight outweighs the cost of paying the “true cost” in the first place.
A business’s logistic support is the lifeline of growth and survival. R&A Trucking is a complete logistics provider that provides solutions that keep your business in business. For nearly 50-years, R&A has been an efficient and cost-effective provider of intermodal freight, cargo handling, and warehouse distribution. For full-service logistics and warehousing that include truck, rail, and sea; R&A is a trusted name in the transportation industry.