Hey, everybody. This is Jeremy with Easy Logistics Management. I’m here today to talk to you about truckload shipping, how truckload freight rates are calculated, and ultimately, how to get better full truckload rates and quotes. My company and my team has taken over our full truckload operations for the last year-and-a-half, and these are some insights and tips and tricks that we’ve learned from dialing in our own process for our clients, so here we go.
First and foremost, what is truckload shipping? Generally speaking, it’s up to 26 standard pallets with the dimensions of 40 by 48 by up to 80 inches tall, approximately, depending on the equipment type. Sometimes if you have a swing door versus a roll-up truck door, then you can get a taller pallet on there. But generally speaking, 26 standard pallets.
Number two, up to 45,000 pounds or approximately 3,800 cubic feet will fit onto a truckload.
Number three, equipment types in the full truckload space can range from van, which is a standard drive van, full truckload, flatbed truckload, which can be strapped or tarped for bigger objects that need to be that don’t fit within a standard drive van. There are step decks and lowboys for taller commodities so that they can pass under freeway overpasses without running into them, and then refrigerated or a reefer full truckload for fruits, vegetables, meats, and market-type commodities or things that need to be kept at a lower temperature, beer, fun stuff like that.
Number four, generally in full truckload shipping, you have one to maybe two drivers, one truck, and it’s a direct shipment mode, minus stops for rest that are needed when you’re traveling cross country or whatever.
Number five, full truck mode is generally or the most economical and ecological freight mode compared to LTL shipping, ground shipping, or parcel shipping, just because you’re maximizing the load of one full truck and you’re getting more pounds and more pallets part of the load capacity of the truck.
Number six, generally in full truckload, the insurance covers up to $100,000, especially in our brokerage organization. It may vary other places, but every truck is covered up to $100,000 in our organization. And then if you need additional insurance, it’s like 25-30 cents per $100 or something like that.
And then number seven, in our experience, truckload freight shipping is generally 50 to almost 65% less expensive if you fully load the truck, compared to less than truckload LCL shipping of one fully loaded pallet at a time. We actually did an article on shared truckload economics a couple of months ago, and we found that it was actually up to 65% less expensive to ship 26 fully loaded pallets versus one fully loaded pallet of around 1,500 pounds of similar commodities, LTL versus truckload, which is pretty amazing if you can consolidate your loads and get that economy of scale.
On to the next topic. Power truckload freight rates calculated. Generally, it’s based on the total weight up to 40,000 or 45,000 pounds rather that you can load onto a truck.
Sometimes it’s based on the commodity type, depending on complexity. Obviously hazardous batteries or hazardous products are going to cost a little bit more, or if the handling characteristics are more complicated, that can bump the price up.
Number three, pallet count and stow ability. So again, how many pallets are going on the truck? How easily are they to handle and stow? Is it easy to get on the truck and configure quickly?
Number four, insurance needs. If it’s over $100,000, in our organization, there is an additional cost, but generally speaking, we’re covered at least up to $100,000 per load.
Number five, truckload freight rates can vary depending on assessorials and complexity of the load. So if you have motorcycles or things that need to be tall or tip over easy and need to be strapped or handled in a different manner, that can affect price as well and bump it up.
Number six, if you need an expedited full truckload shipment, generally we see this in two-man teams where the truck moves nonstop cross country just to get it from A to B as fast as possible. That can definitely bump up the price. Otherwise, in traditional truckload, it’s one man, one truck, and then they’re only allowed to drive for a certain amount of hours per day per the law, so it takes a little bit longer.
Number seven, ultimately a lot of it’s based on mileage and weight as well, so depending on how many miles you’re driving, that’s going to affect the price of the truckload.
Also the route and if there are any return loads. Popularity of route can affect how much it’s going to cost you, because obviously, if there’s no equipment in your local area, if you’re out in the rural area, or if you’re shipping into a rural or less desirable area where there’s no equipment or there’s no loads, these owner-operators are going to have to charge you more to go there because they’re going to have to drive back out without picking up another load and maximizing the efficiency of their truck. So all things to consider.
And then full truck load and intermodal, which is basically just putting a full truckload body onto the rail system and then offloading it back onto a truck at the tail end for final mile delivery, are the most economical ways to ship freight because you’re maximizing the load capacity of the truck. The only difference is intermodal doesn’t go everywhere because it’s all based on the rail spur and where you can offload and load commodities, so it can be less expensive versus full truckload, but it just depends where the stuff is going, so just got to keep that in mind.
And then ultimately what you probably know is how do I get better full truckload rates or quotes? So my tips for that would probably be use a truckload freight brokerage like ourselves. We leverage the power of the truckload interface and trucks.com, so we have thousands and thousands of owner-operators and smaller fleet providers that can service basically anywhere in North America and a lot of options. So by leveraging us or a similar organization, we can generally get you better pricing and access to more commodity types and assets.
If it’s something that’s hyper-regional, I would suggest you develop a local owner-operator relationship and you can get drastically better rates.
We saw an example of this. One of my friends owns a metal working shop and they just ship really heavy manufactured metal parts and we can’t touch anything that’s regional there. It has to be… Their owner-operator contacts will run it for a fraction of what we can get on the brokerage market, so it always helps to have some blend of them both depending on what you’re doing.
Number three, I’d probably say, as always, try and automate the process as much as you can. Full truckload isn’t quite as automated as LTL shipping currently, but it’s getting more and more so, so get a good transportation management system or freight management system similar to the one that we use. And then if not, you can also leverage the power of the DAP truckload system or truckstop.com if you don’t have a brokerage organization that you work with like ours.
If you don’t have a complete full truck, I would suggest that you try doing shared truckload services. There are some companies that offer this but you can always leverage a company like ours and commingle loads together, whether it be with your other companies in your area that you’re friendly with or in your market because if you can cobble together half a truckload of your stuff and half a truckload of your friend down the street’s company stuff, and whether we have to pick it up in a couple of stops and drop it off in a couple of stops, the economics are huge.
In the example I used before, up to 60 or 65% less per pallet to ship a full truck versus one fully loaded pallet at a time. So it’s worth the effort if you can put two loads or three loads together. So something to think about.
And then obviously ease of loading and unloading because you only get a certain amount of time to load and unload the truck, so the better you can crate it, palletize your goods and make it easy to handle, the faster we can load and unload the truck and then you won’t have to pay any additional holdover fees, things like that, that can drive that price up.
And then obviously seasonality and demand, you can’t avoid all of this. But during produce season sometimes the full truckload rates go through the roof because we’re moving all the produce that’s being harvested from farms and has to move in a certain amount of time, so if you can plan around that, you can get better rates.
This is something that we’ve definitely become way better at and I think we do a really good job, so if you’re grappling with how best to handle your full truckload shipping needs or you need better full truckload quotes or rates, it’s my company, we’re looking to grow, and we’d be honored to show you what we can do for you, so give us a call.
I can be reached at 866-854-5341, extension 3 or Jeremy at Easy Logistics Management. Hope you guys are doing great and give me a call anytime, I’d be happy to help.