The combination of increased demand for tanker trucks and diminished capacity has created a dangerous imbalance that threatens the supply lines of chemical companies and other bulk shippers. The risk is highest for smaller bulk shippers who lack the volume to attract carriers’ business.
Scarce tanker truck capacity has created an industry dynamic in which the hunters (carriers pursuing freight) are now the hunted (carriers being pursued for scarce capacity). This dynamic has now been in place for several years – starting with the truck driver shortage and then on through the COVID-19 pandemic.
In times past, as a shipper, you’ve been asked to rate carriers. Well, guess what? Now carriers are rating shippers – on Google, Yelp and newer apps like Dock 411. The tables have turned and, from where we sit, bulk shippers have been slow to respond to this new reality.
The unwillingness of bulk shippers to take the steps required to become “shippers of choice” is a danger sign in a seller’s market, where transportation providers are more selective about the companies they haul for and the locations they visit.
In the bulk freight world (where everyone seems to know everyone), shippers with a poor reputation among drivers and carriers will find it’s a tough label to shake.
This article offers 7 tips bulk shippers can take to make their freight more attractive to obtain tanker truck capacity and keep their supply lines moving.
That all changed with the driver shortage and the pandemic. Shippers, one and all, now appreciate the risks to business presented by extremely tight freight capacity. As such, they’re more likely to act urgently to prioritize “shipper of choice” initiatives.
Below are some of the risks if tight tanker truck volumes lead to supply chain disruptions.
Walk into most process industry manufacturers – chemical, food, pulp & paper, etc. – and you’ll find stacks of binders with ISO-mandated procedures. So, why is it that these same companies lack well-thought-out, clearly documented processes for loading and unloading tanker trucks? To start, think about documenting the following:
Some shippers’ policies are out of step with the reality of the current bulk freight market. For instance, many have a “first come, first served” policy for drivers on unloading, regardless of appointment time. That’s frustrating for drivers who work hard to keep to a precise schedule.
These drivers dislike the policy because the resultant waits eat into their HOS. Carriers dislike the policy because it often means they have to pay drivers to sit and wait. More and more carriers, and the freight brokers who may use them, are choosing to avoid locations with “first come, first served” unloading.
Another annoyance for drivers is not being able to check in quickly. One company we know has a standing loading dock lunch break at noon. If a driver arrives at 11:45, he’s typically waiting until 1:15 to get someone’s attention – and he’s on the HOS clock the whole time.
These kinds of practices ignore the tank truck driver capacity constraints of the current market. Perhaps the best first step is to start monitoring truck detention time at your plants, if you don’t already. Then examine ways to speed the process. If you want a head start on the turn-time calculation, just ask your transportation providers.
They are certainly keeping track of driver delays at your plant and sharing any frustrations they have with anyone who will listen.
Now more than ever, flexibility will score you major points with carriers and freight brokers, particularly with liquid bulk loads where a host of factors outside of the carrier’s control – tank wash facility delays, loading delays, road construction – can impact arrival times.
Your carrier and freight broker partners are working around the clock to secure capacity for you and other customers. The odds are that – when the market is crazy – they may not be able to secure tank truck volumes that line up just the way you want. But, if you’re willing and able to make a few tweaks on your end, your transportation partner can do the same and get your loads on the move.
In contrast, inflexible shippers can create enemies and land on the “shippers to avoid list” (yes, these lists really do exist). Take, for example, the mid-sized manufacturing company in the Northeast that strictly enforces appointment times for carriers – 15 minutes late and you might have to wait 1–2 days to get in. That company’s suppliers don’t have a choice – they have to figure out a way to deliver. But carriers don’t, and some won’t.
Here are some ideas to introduce more flexibility into your freight loading and receiving operations:
Do an honest assessment of your own operation from a driver’s point of view: Is your location driver-friendly? Here’s a partial checklist to help answer the driver-friendly question:
Drivers know the locations that appreciate and respect the work they do – and those that do not. They are quick to share their assessment – directly or through social channels – with their employers and other drivers. By investing the time to become a driver-friendly plant, you can get on the right side of this discussion.
Some shippers are notorious for playing transportation providers (freight brokers, carriers) against each other – using transportation RFQs to squeeze another nickel of profit from the rate. It’s a purchasing tactic that simply doesn’t work in a market where tanker truck volumes are scarce, and providers don’t have to sacrifice profit to stay loaded. Given a choice, they will choose to service shippers where a relationship of trust and mutual respect has been established.
Sure, it takes time to build these relationships, but there is a financial payback. Here are some outcomes of a long-term partnership that can generate cost savings for you.
The most profitable carriers keep their trucks loaded, continuously re-loading and moving from point to point and back to the terminal. They appreciate (and are loyal to) shippers and brokers that can help identify re-load opportunities. That’s hard for smaller bulk shippers to do, and it’s one of the reasons you should consider partnering with a freight broker that specializes in tanker truck capacity.
These specialist brokers work with all types of bulk shippers, so they can help their carrier partners re-load in a way that you, as an individual shipper, cannot. You can use freight brokers on an as-needed basis, such as for specific lanes, or you may choose to outsource your entire transportation operation. Here are some of the advantages of outsourcing freight management:
The current market for bulk freight, where demand exceeds supply, is fraught with risk for bulk shippers. Your company’s survival depends on your continued ability to source scarce bulk capacity at an affordable price.
The winners will be the process industry manufacturers that completely transform corporate warehouse, freight and purchasing operations that, let’s face it, have historically taken tanker truck capacity for granted. Those companies – the true shippers of choice – will earn the loyalty of the carrier community, and the gratitude of their organizations.