Six Ways to Gain Capacity Now

Capacity will continue to be tight in the coming months.

That was the consensus of a TIA panel discussion I participated in called “Preserving Capacity Before We Die.” That alarming and somewhat humorous title captured some of the anxiety felt among brokers and 3PLs, including my fellow panelists Robert Nathan, CEO of Chicago-based 3PL Load Delivered Logistics, and Joel McGinley of the broker consulting firm TranStrategy Partners. Mark Szakonyi from the Journal of Commerce served as the moderator.

How can brokers continue to secure capacity in a tight market? We offered these six tips:

  1. Maximize the amount of money a carrier can make – This means more than simply asking a shipper to increase pay per mile. It also means advocating for the carrier, and urging the shipper to reduce loading, unloading and detention time. You may not be able to influence the shipper in every case, but you absolutely should share any information with the carrier about dock conditions or other aspects of the job, even if it makes the freight seem less attractive. Honesty is important to carriers, and they will remember you next time they have a truck available.
  2. Give your carriers the loads they need – When you make life easier for your regular carriers, they’ll do the same for you when you’re in a pinch. Keep your smallest carriers moving with loads that make a complete round trip to their home base or get them to their next desired destination. Your large carriers want 48 hours’ lead time, a rate agreement for each load, and a single point of contact within your organization, so they can make one call and get details about all the freight they are hauling for you.
  3. Treat carriers like customers – You always want to maintain good relationships with carriers, but it is especially critical in a tight market. Cultivate carrier loyalty by treating your carriers like customers. Treat them honestly and fairly, give them access to good freight and good information, and they will naturally begin to call you whenever they have trucks available.
  4. Tap intermodal to secure freight – Work with intermodal marketing companies (IMC’s) to give your business an intermodal capability. Brokers who are able to tap intermodal become much more valuable to a shipper.
  5. Use historical information on capacity – Look at data from previous years to understand where capacity has been tight and where rates have been. DAT offers a number of tools that can help. Our LaneMakers tool (available under the “Research” tab in the DAT Power), shows you who has been running the same lanes that you have loads for. You can contact these carriers when you’re looking for capacity in specific lanes. DAT RateView™ subscribers have access to 13-month lane rate histories, in addition to current market rates.
  6. Use technology to speed up procuring and loading a qualified truck – If you want to secure the best trucks, you need to find them, qualify them, and, once you’ve locked in a rate, onboard them quickly and efficiently. DAT expedites the process by making it a single, integrated workflow. For operational, accounting and analytics efficiencies, DAT Keypoint® transportation management software is designed specifically for brokers, so you can manage your entire business seamlessly.

By the way, according to DAT’s annual Broker Benchmark Survey, 75 percent of brokers in the DAT network reported no capacity shortfalls last year, and we have added one-third more capacity this year. That said, a number factors could tighten capacity in the coming months, including a shortage of qualified drivers and reductions in fleet productivity that result from Hours of Service (HOS) rule changes. At the same time, demand may increase, either due to future economic growth, including imports and exports, or due to seasonal demand factors such as produce harvests and holidays.

DAT’s LaneMakers tool shows you who has been running the same lanes that you have loads for. You can contact these carriers when you’re looking for capacity in specific lanes.

Use historical data to predict what times of year will have the tightest capacity. This graph shows national average load-to-truck ratios for the past four years.