Recent conversations with Account Representatives from Regional and National LTL Carriers are indicating unprecedented service failures and not recently seen actions to counter their overload of business."We are missing 400-500 pickups a day throughout our network."
"...due to overwhelming shipment levels for some of our (direct) points...we found it necessary to EMBARGO shipments destined for..."
"...will be seasonally SUSPENDING OUR GUARANTEES for (Expedited) shipments... we feel it is necessary to implement this suspension due to peak seasonal shipping volumes, summer vacation schedules, changes to industry regulations (ELD), and the industry driver shortage."
"...until further notice, we will be SUSPENDING VOLUME QUOTES..."
"We CANNOT FIND ENOUGH DRIVERS to cover all the volume we are seeing."
It appears carriers are managing the overwhelming volume a few different ways. Some carriers are looking hard at Operating Ratios (CARRIER COST DRIVERS) and determining what freight best fits their model.
To weed out those that do not, some are increasing rates with little to no explanation and at times no warning (a good reason to have rock solid accountability for your carriers.)
Others are reacting to emergency distress by embargoing freight. Literally, stopping any movement of freight out of a terminal delivering to specific zip codes. These embargoes may last a couple days or even a week. We are fortunate to have the ability to block the zip codes from rating in the ReconTMS, preventing service disruption for our clients, but we are limited by notice. If the freight is there before the notice or placement of the embargo, nothing can be done.
Some carriers are suspending access to the service that they perform best. If you need something delivered or heads are going to roll, you choose this expedited "guaranteed" service. When a carrier suspends their money back guarantee of this service... what does that tell you? They are not so confident you will not lose your head!
LTL Volume shipments have their place in the LTL world. When a carrier stops quoting volume, normally a good filler of capacity, it tells you, they have none.
Not one bit of this is good for the shipper. Not only are service failures piling up, costs are rising. The weeding out comes in all shapes and sizes... from massive rate increases to new accessorials like changing linear feet (REMEMBER WHEN 12') or charging Detention for taking longer than 30 minutes to get a driver in and out even when not your door.
We've seen in the not so distant past, LTL carriers make dramatic changes when the economy was weak by aggressively reducing pricing to keep equipment moving. Unfortunately, this set expectations among shippers that is making it difficult to accept today's reality. Expectations that Residential, Limited Access or Lift gate fees should be waived was the norm, but is becoming increasingly difficult when today, carriers are pushing back even on waivers of Appointments and Reweigh fees...
One might say, this will not last forever... question is, will it take an economic slowdown to impact the capacity problems? Not sure that will be enough. We've heard the only factor in the future that will bring cost down is Driverless Trucks. Is that more likely than Millennials wanting to drive for a living?
Love to hear your thoughts in the comments below...
What is impacting your freight most in this new reality?
What factor will shift the scale back to the shipper?