In the past few months, the freight industry has been reporting troubles keeping up with the current demand for LTL services. Pandemic-related causes such as spikes in eCommerce sales, stimulus checks, and carrier staffing shortages are the most obvious culprits. Still, the usual suspects are also seemingly heightened this year.
“Common causes of overcapacity – like extreme weather and seasonal spikes – seemed to have hit carriers harder in this past year. These common occurrences, when coupled with an explosion in consumer demand and staffing challenges, have been tough on carriers,” says Chris Randall, SVP of Freight Club, one of the fastest-growing LTL shipping solutions.
Causes of overcapacity, which seem to be hitting carriers from all angles, are putting them in a constant state of peak season, complete with high rate increases and anticipated delays. Some carriers have even turned away business to focus on providing better service to higher priority clients. “It’s a seller’s market. Shippers looking for deals may be out of luck without a shipping partner who can negotiate for them,” Randall explains.
Randall believes that rate increases and limited accessibility are why tech solutions like Freight Club are becoming increasingly popular – they automate and facilitate the hunt for affordable freight.
As shipping makes up 18-30% of the eCommerce product cost, much is at stake for retailers right now, and sourcing discounted freight is only the beginning of building a shipping strategy free of profit drain. Thankfully, freight marketplaces like Freight Club provide another benefit to prevent losses: creating a multi-carrier network. “Many shippers rely on just one or two carriers to manage their entire inventory to receive volume rates. After the year we had, shippers are beginning to realize this is a big risk to their business and their profits,” Randall warns.
In addition to risk-reduction, the multi-carrier approach opens countless opportunities for saving. “A more diverse carrier mix opens up savings opportunities based on geography, reduced damage rates through curating carriers to a specific product type, and better customer experience resulting in better reviews. The possibilities for saving are endless,” says Randall.
Consultants at Freight Club are currently helping retailers spot these key opportunities by leveraging years of eCommerce shipping data to increase the profitability of shipping programs and even specific SKUs.
As retailers begin plans for another record-breaking holiday season, preventing strain on operations during the high demand will also be top of mind. In addition to providing savings, Freight Club is also offering retailers built-in customer service, insurance, and claims management – aspects of shipping that are harder to manage during high demand.
“We like to say that people come for the rates and stay for the customer service – our team has direct lines of service to all of our carriers, allowing for faster carrier updates. Our platform is also built for easy self-service, making filing claims easier with faster payouts, even during times of overcapacity,” says Randall.
As the freight market continues to get shaken up by high demands, retailers will continue to grow strategically in their use of technologies while broadening their carrier networks. The tech that delivers on these new strategies will continue to be adopted by retailers looking to reduce risk and gain an edge on the competition.
“This past year, Freight Club saw a 300% increase in shipments. The fact that our tech has made shipping accessible to retailers of all sizes during a time when carriers are at max capacity shows the value that technology combined with a diverse carrier network can provide in keeping eCommerce a meritocracy,” says Randall.✷