Thanks to your continued business, Trinity was able to rise above the competition, arranging over 200,000 shipments in 2011. While others in our industry were either closing their doors or being acquired by larger suppliers, Trinity gained market share and utilized our experienced team to deliver on our promise to you, logistics solutions.

Another area we grew stronger is in our vision for our future. Always striving for improvement, we listened to suggestions from our clients, team members, and suppliers. Our future strategy will leverage and build upon our strengths, and is beginning January 2012 with a name change from Trinity Transport to Trinity Logistics. Our customized solutions division previously referred to as Trinity Customized Logistics will fly the same flag, Trinity Logistics. We look forward to this talented group designing solutions for all of our clientele!

This change reflects a true representation of our business, serving as a solutions provider for our customer’s logistics needs, ranging from Truckload, Less-Than-Truckload,  Intermodal, freight management with a Transportation Management System (TMS), or other designed services. The name change from Trinity Transport Inc. to Trinity Logistics will help communicate our ability to offer a variety of transportation solutions. Trinity Logistics is led by the same dedicated and committed leadership team as it has been since 1979. This customer service model has been the approach by our Trinity Customized Logistics team from the outset, and our entire team is embracing that model moving forward.

We look forward to serving you as Trinity Logistics.

Best wishes for a great and successful 2012,

Jeff Banning, CTB

President & CEO

As the leaves begin to fall and the temperatures to drop, many companies find themselves heading into the final quarter of their fiscal year—reviewing their 2011 budgets and planning for 2012. During this process, especially with transportation costs on a steady incline, many of these companies may also find themselves facing the unpleasant prospect of a smaller bottom line. However, by understanding their transportation costs as a percentage of their revenue and the negative impact this could potentially have on their bottom line, companies may be able minimize the impact in order to realize greater profits.

If you are looking to understand your transportation costs as a percentage of your revenue, it is important to first understand what is considered an acceptable range. Transportation costs should typically be between 3-8% of your revenue. If your freight spend is 3% or less, then you are doing a great job managing these costs. If you fall within the 5-8% range you are doing well, but you may still be able recognize additional savings. Anything over 8%, however, is a cause for concern. When your freight spend becomes such a significant percentage of your total revenue, it starts to have a negative impact on your bottom line. To put it in perspective, if you average $1million in annual sales, imagine the impact paying or saving an additional $10,000 a year in transportation could have on your bottom line.

In order to determine your transportation costs as a percentage of your revenue, you must first know what your transportation costs are. While this sounds relatively obvious, many factors could actually make this a rather complicated undertaking. For example, many companies rely on email and spreadsheets to manage their transportation so the ability to generate this type of reporting is pretty much nonexistent. In addition, some companies roll their transportation costs into the price of their product and have no way of separating this out within their current system. As a result, many companies are not sure how much they are spending on transportation.

Detailed reporting is required to truly determine how much you are spending on freight. If you cannot determine what percentage of your sales is being spent on transportation, then you may want to consider budgeting in a TMS or ERP system that can provide you with this type of functionality. The long-term benefits will far outweigh the initial upfront costs. Having detailed reporting will allow you to take the appropriate actions whether it is looking for efficiencies to offset the increases to your transportation costs or working with your sales people to sell your products at a higher price. Determining your true freight costs can drive actions that can have a major impact on your bottom line.

If you are not sure where to start or would like some help analyzing your costs send me an email at brian.kenney@trinitycustomized.com and I would be happy to work with you.

There are several major pieces of legislation that will have
a major impact on transportation that you should be aware of.

CSA 2010- CSA
went into effect in December of 2010 and was designed to make the roads safer
by measuring the performance of trucking companies and the individual drivers
that they work with.  It is still unclear how much of an impact
CSA will actually have on the industry, but industry analysts believe as many as
200,000 drivers could lose their jobs as a result of the new regulations.  Some of these drivers should probably be
taken off of the road, but many of them are just going to be victims of circumstance.  The more you drive the more likely you are
going to be to get into an accident or get a speeding ticket.  There are going to be many experienced
professional truck drivers that are no longer going to be able to make a living
driving a truck.  These are drivers that
have experience handling your freight and driving trucks in bad weather.  Many of these experienced drivers are going
to be replaced by drivers with no experience.
When someone is driving 80,000 lbs on a highway at 65 mph you want that
person to have as much experience as possible.
As a result of CSA, experienced drivers with good scores will be in high
demand and will be able to act as “free agents”.  Good drivers will be able to demand higher
wages, which will eventually be passed on to shippers.  You can check out the FMCSA website for more
information about CSA http://csa.fmcsa.dot.gov/default.aspx.

Hours of Service
(HOS)-  There will be a final ruling
in October of 2011, but it is believed that the biggest change will be to
reduce the number of driving hours per day from 11 to 10.  This does not sound like a lot, but many
shippers operate on regional distribution models and reduction of just one hour
per day could devastate many of these models.
Over the course of a week a driver may drive over 300 miles less which
would have a big impact on that driver’s pay.
Drivers will want to be compensated for the lost wages.  In addition this will require more trucks on
the road to move the same amount of freight that is being moved today.  Additional trucks on the road would cause
even more congestion to the nation’s roadways causing additional traffic which
could result in lost hours for drivers.  In a market that is already in the midst of
a severe driver shortage, a reduction in driver’s hours would be devastating
and extremely expensive for shippers, carriers, and consumers. 

Electronic on board
recorders (EOBR)-  There is a
potential legislation that would require all carriers to install EOBR in their
trucks to replace their paper log books.
Currently, log books are utilized by drivers to record their on/off duty
times.  It is widely believed that drivers
take certain liberties with their paper log books that allow them to drive a
few extra miles.  However if EOBR
legislation is passed when a driver reaches his allotted hours he will lose his
ability to drive.  If the driver
continues to drive without hours then this will have a negative impact on the
driver’s CSA score.  There has also been
talk of the EOBR being connected to law enforcement.  The FMSCA currently is requiring carriers/drivers
in certain cases to install an EOBR as part of their corrective action required
and many carriers are also proactively installing EOBR devices to regulate
their drivers.  In my opinion EOBR would
be the biggest game changer to the transportation industry since the trucking
industry was deregulated in 1979.  Every minute that a driver has to drive
will become more valuable and the penalty for holding a driver up will also
become more substantial.  Detention
charges will most likely go up and will be charged after a short window.  Stop off charges on multi-stop loads will
also go up.

The bottom line is that transportation costs are going up
and will continue to do so for the foreseeable future.  Carriers are in control of the market and
chances are you need them more than they need you.  The good news is there are things that you
can do to offset the cost increases you are seeing on your freight spend.  A good place to start is to review your
transportation personnel, process and technology.  If the people handling your transportation do
not know what CSA is then you have room for improvement.  If your processes for handling transportation
have not been reviewed or updated recently then you should probably take a look
at them since the transportation market has gone through several major shifts
in the last four years.  If you are using
spreadsheets, faxes, emails, and phones to manage your freight you may want to
look at some transportation specific technology.  Your ability to quickly load and unload
carriers will become extremely important going forward.   The bottom line is that you need carriers as
much if not more than they need you right now.
The shippers that treat their
carriers as a valued partner will be able to overcome the challenges of the
transportation market.

It is simple supply and demand.  There is more freight than there are trucks.  After losing so much capacity during the down turn, the demand will continue to be greater than the supply for the foreseeable future, even at the anemic growth rate of the economy.   Some carriers are looking to expand their fleet size to capitalize on additional opportunities, but that is not the case with most carriers.   Even an increase to the current rate of expansion by existing carriers will not provide any relief for the capacity shortage.

Rates continue to increase on both the line haul (point to point rate) and the fuel surcharge (FSC).   Line haul costs have gone up dramatically in the last two years after having fallen to their lowest point in ten years during the peak of the recession.  Many full truckload carriers have increased between 5-10% in the last two years and in certain niche markets, like flatbed, rates have increased even more.  The seasonal rates that are impacted by produce have seen even greater increases and many reached an all time high in 2010 just to see those records broken again in 2011. These rate increases are not something that is limited to the full truckload segment of the industry.  Intermodal rates have increased in the last few years as well.

Intermodal rates have gone up to reflect the increase in demand for this service.   After seeing a decline in volume during the recession, intermodal business has bounced back in the last 18 months.  Many months have shown double digit increases in month over month volumes.  Small increases in the economy and the tightening of the truck market have been the driving force behind the resurgence of intermodal business.  The increases in general intermodal rates have not been as high as truckload rates and have probably averaged between 3%-6%.  However, during peak intermodal season, usually between late August and December, rates will spike and capacity becomes very limited.  Intermodal is considered a less costly alternative to over the road transportation and many times rate increases are kept in check.   Many times intermodal will prove to be a cheaper alternative to over the road transportation on the front end, but you need to be aware of the accessorials involved with intermodal.  Detention in the intermodal world will usually be applied after less waiting time and is typically more expensive than with over the road transportation.

The costs in the less than truckload (LTL) market have also gone up.  LTL carriers have been raising their rates by 5%-7% per year over the last two years and there are rumors that some LTL carriers will be taking another increase in early 2012.  If certain LTL carriers do take another rate increase in February it would be the 4^th rate increase in about 24 months.  Several major LTL carriers have also taken steps to reduce their fleet size by consolidating operations and closing terminals.  These actions have reduced capacity, which has helped the LTL carriers justify their repeated cost increases.

Line haul rates are only a part of cost increases that you are paying to move your freight.  Fuel surcharges have almost returned to their pre-recession levels.  In the summer of 2008 we saw the average cost of diesel reach $4.76 per gallon.  In May of 2011 it was up to an average of $4.12 per gallon.   Most fuel surcharges are either based on a percentage of the line haul or per-mile based on the cost of fuel.  For instance, if the average price of fuel was $3.851 your percentage would be 28.5% or $.046 per mile.  In this example the percentage would go up .5% for every $.049 that the fuel price goes up.  The per-mile FSC would go up $.01 for every $.06 that the cost of fuel went up.  So if average price of fuel went up to $3.93 next week then your percentage would be 30% or you would be paying $.047 per mile.  If you take into account that fuel prices are up about $.90 from where they were at this time last year you are paying 18% or $.15 more in FSC, depending on whether your FSC is based on percentage or per mile.    These line haul and FSC increases previously mentioned refer to contractual rates.  If your pricing comes from the spot market you have probably seen much larger increases. 

If your company buys transportation on the spot market you have probably seen your rates increase by as much as 25% in the last two years.   I would strongly recommend that you look into moving away from the spot market if at all possible.  The spot market costs you more in the long run.  Most spot market rates are given with line haul and fuel surcharge combined into a flat rate.  Many times this means the total cost is rounded up to a whole number.  This is a big difference from contractual rates with a varying fuel surcharge.   Let’s say you had a dry load moving from Chicago to Boston and contractual rate was $1.50 per mile on 990 miles with a fuel surcharge of $.35 per mile.  Your total cost would be $1831.50.  If you asked for a spot market quote on that load your rate may be $1850.  If you are looking for a truck in a difficult market or maybe you need a load moved on a Friday your quote could be as high as $2,200 for that same lane.  The idea of requesting a spot market rate is to get the lowest rate possible for that one load.  However, many times you can get a rate from a transportation provider, but that does not necessarily mean that you can get the truck you need for the rate.  In the current market you need to be worried about getting the freight moved first and the cost second.      http://trinitycustomized.wordpress.com/2011/06/30/do-you-want-a-rate-or-do-you-want-a-truck/

The cost of transportation is going up and many of the factors driving the increases are out of your control.  However, there are many things that you can do to offset these cost increases.

1.  Look into making your processes more efficient.  If you can streamline processes you can save time and increase the productivity of your staff.
2. Incorporate technology into your transportation.  Email and spreadsheets can do many wonderful things, but they are not the best tools available to manage transportation.  Many companies have ERP systems that may have transportation functionality available or you can look into a Transportation Management System (TMS).
3. Invest in transportation industry training for your team members that are responsible for moving your freight.   There are many transportation industry events and associations that can be a great resource for your team members.  Even subscribing to transportation trade publications can be a big help.  If you are not spending money on the front end to make sure your people know what is going on in the transportation market you will end up paying more in rate increases and transportation service failures on the back end.
4. Look into outsourcing your transportation.  If your transportation is handled by someone without a transportation title, such as someone in customer service, sales, or purchasing you may want to explore the benefits of outsourcing your transportation to a 3PL.  Allow your employees to focus on their main responsibilities and allow transportation experts to help you streamline your processes, incorporate technology, and manage your costs.

To read the first part of this blog, click here: What Management Needs to Know about the Transportation Market, Part 1: Capacity

Stay tuned for Part 3: Legislation coming next week.

Transportation may not be high on your priority list or even on your list at all, but you should probably make some room for it.  You need to pay attention to the transportation market because costs are continuing to increase and capacity continues to tighten.   This means it is getting more expensive and more difficult to get your freight to your customers.   You may have customers that will fine you if your product does not arrive on time or they may even cancel your contract over repeated transportation issues.    I know that many companies view transportation as a cost of doing business, but if you are not aware of what is going on in the transportation market then you probably have not been able to make the necessary changes to keep your costs in line.  In general, your transportation costs should be between 3%-8% of your sales.  Anything higher than 8% means that your transportation spend is probably cutting into your bottom line.  If you do not have a lot of free time to spend learning about transportation, but you want to be aware of what is going on in the market, then you should focus on  these 3 main areas—capacity, costs, and legislation.

Part One: Capacity

Capacity is the biggest factor that any company should be concerned about.  Currently there is a major shortage of equipment as a result of the great recession.  Between 2007-2010 over 5,000 trucking companies went out of business and over 380,000 trucks were taken off of the road.   That is about 7,900 less trucks available on average per day in the 48 continental states.   Certain segments have been hit harder such as flatbed, while other segments such as tankers have not been hit as hard.  But overall capacity is not where it needs to be to meet the current demand and all indicators point to it getting worse.

Drivers are also in short supply.  Many drivers have reached the retirement age and have/will be leaving the driver pool.  In addition to retiring drivers, many drivers are being forced off of the road by the new CSA regulations.  CSA went into effect in 2010 and we have only just started to feel the potential impact. As a result, many trucking companies are looking to replace drivers that they have lost and are not in a position to expand.   Even with a 9% unemployment rate carriers are still struggling to recruit new drivers into the industry.  Being a professional truck driver is not a career for everyone and many people are not interested in a job that may require them to live in a truck for weeks at time.  As a result many trucking companies have started to offer sign on bonuses to try and attract new drivers. They are also offering bonuses to try and lure experienced drivers away from the competition.  These bonuses will eventually be passed on to shippers as part of their line haul rates.

The same scenario is true on the equipment side.  During the recession many carriers had to hold onto tractors and trailers longer than they normally would because they could not afford to replace them.  However, most carriers are now in a position to replace their older equipment and this sudden spike in demand for new tractors and trailers has been met with mixed emotions.

Many truck and trailer manufactures reduced their production capacity during the last several years and are now struggling to meet the demand for new equipment.  As a result there is a 6-9 month backup for new equipment orders.  The spike in manufacturing of new equipment has also been slowed by a lack of raw materials.  The sudden demand and short supply for certain raw materials is causing the price of new equipment to go up—another cost that will be absorbed by shippers.  Keep in mind that this surge is being led by a push to replace aging equipment and not by a push to expand fleet size.   So, even if a carrier wanted to add 100 tractors to their fleet they cannot just go to the dealership and pick them up.

Many carriers are not interested in expanding their fleets because the current capacity situation allows them to control the market and generate their desired profit per truck for the first time in several years.  Most publicly traded carriers have been reporting great earnings in 2011.  http://wallstcheatsheet.com/stocks/transportation-stocks-delivering-explosive-earnings-growth.html/.

A few quick actions you can take to see what impact transportation is having on your bottom line.

1. Determine what % transportation is of your total sales.  If you are over 8% then you probably need to make some changes.  Even if it is between 6-8% , you still can probably make some changes to your processes/personnel that can save you some money.
2. Examine the way drivers are being treated when they come to your facility.  Many drivers have final say on which loads they haul and one of the factors that they will use to determine what loads they take or don’t take is past experience at the pick up or delivery location.  If drivers are treated well and get loaded/unloaded quickly then drivers will accept loads that involve your location. They may even request your freight.  However, if drivers are treated poorly and  have to wait a long time to be  loaded/unloaded then you will be paying more to get carriers to come to your facilities, paying detention when you hold them up or even risk drivers refusing loads that involve your company.

For more on capacity, visit our blogs:

• Do you want a rate or do you want a truck?
• It’s a carrier’s world part 2: Drivers wanted
• It’s a carrier’s world
• Carrier capacity: Look beyond the bid

Stay tuned for the next installment of this blog when we talk about cost increases in the transportation market.

A couple weeks ago I had family visiting from out of town, so we decided to go to the beach. Even though the outside temperature was 95 degrees with a heat index of.. .oh I dunno…400 or so, the water temp was surprisingly chilly. After playing in the sand with my niece for about an hour, I needed a dip in the ocean to cool off. Was I going to do an all-out David Hasselhoff a la Baywatch dive into the water, or would I dip my toes into the water, slowly immersing myself? I went the latter route, slowly entering the water like a wimp until a nice big wave decided it was tired of waiting for me to get wet.

When it comes to transportation management system (TMS) deployment, companies are often wondering whether they should dive in head first, or test the waters with one or two facilities before completely soaking themselves with a full-scale implementation.  So what’s the better option?  It depends on a few factors.

First of all, how deep is your knowledge of your current transportation processes across locations/divisions? Just because each distribution or warehouse location is part of the same company, it doesn’t mean they share the same transportation processes. If you have a strong understanding of the processes of warehouses 1 and 2, but warehouses 3 and 4 are anybody’s guess, then it may be best to test the waters with just facilities 1 and 2. If you’ve already taken the time to map out the processes for all locations, then you may be ready for a full-scale approach.

The other thing to consider is the level of buy-in from all identified stakeholders in the TMS deployment. Are they all for the new system and accompanying improvements in processes, or are they dead-set on keeping things the way they are? If you’ve only received buy-in from key personnel at one or two locations, then it may be best to test deployment at those facilities. Chances are that a successful deployment at one or two locations will help you get that much needed buy-in from those facilities that are the main resistors to change.

Finally, you’ll need to consider whether the technology can support a phased deployment approach. Is the TMS flexible enough to get additional locations up-and-running quickly after initial implementation at your test warehouses? Is it customizable enough to support the differences in processes across locations? Can the technology vendor or 3PL provide the flexible service options and pricing structures that are needed to support a phased approach? The answers to these questions will have an effect on your ability to test the technology at select locations.

These are just a few things to consider when deciding whether you should take a full-scale approach to TMS deployment, or whether it may be better to first test the waters. An analysis of your internal processes, levels of buy-in from company personnel, and review of system capabilities will help you select the best approach.

By the way, the next time you’re at the beach…..keep an eye on those waves.

Can you remember when gas prices first reached the $2.00 per gallon mark?  What about diesel?  Do you remember how you felt about it?  How would you feel today if you could buy gas for $2.00 per gallon?    Regular unleaded gases prices first passed the $2 per gallon mark during the week of May 24, 2004.  Diesel did not cross the mark until the week of September 27, 2004.

I remember thinking “What the…??” when it happened.  At the time I was commuting about 70 miles a day to work and I had to fill up my tank about twice a week.  I equate the feeling to having to pay $4 for bottled water a sporting event.  You feel like you are getting ripped off and there is nothing you can do about it.  I guess the difference is when you go to a sporting event you know that you are going to be paying inflated prices for everything and you are mentally prepared for it.  However, I wasn’t mentally prepared for that feeling when I went to the gas station.

The week before gas broke the $2 mark it was at $1.97, so it wasn’t like the cost went up $.50 in a week, but there is a big psychological difference between $1.99 and $2.  It is like buying something for $19.99 instead of $20.00.  At $19.99 it is a deal, but at $20 it is not worth it.  The terror of $2 gas only lasted about 2 weeks before it fell back down under $2 per gallon.  Gas prices stayed below the $2 mark until May of 2005 and kept climbing after that.  I remember when I realized that $2 gas was here to stay, I actually started searching the web for the cheapest gas and sometimes would drive out of my way to save $.03 per gallon.  I remember waiting in line 5 or 6 cars deep to save a total $.18.  After that I gave up on trying to save money on gas and I just accepted the fact that this was going to be the way it was.

$2 gas was nothing compared to what happened in 2005.  During the first week of January 2005 gas was at $1.74 per gallon.  By the fall of 2005 gas prices rose over $1.25 per gallon and broke the $3 mark for the first time after Hurricane Katrina.  Gas prices dipped after that, but never below $2 per gallon.  In 2008 we saw gas top out at $4.05 and diesel at $4.76 a gallon.  If $2 per gallon was the “What the…??” price, then what is $4 per gallon?

The price per gallon is only part of the stigma; the real horror is the total cost of filling up your tank.  For most people $20 to fill up your tank is a great number.  At $20 you are not concerned with the price of gas and most of us would probably be happy with a $30 fill up at this point.  But when you are filling up the tank and watching the cost pass $35, $40, $47, $59, and finish out over $60, it is truly a horrifying event.  It is like the first time your kids ask you where babies come from or that they tell you that they want to marry Justin Bieber.   It is a very scary thought and one most of have to deal with every week.

So what is your magic number?  When does the cost of gas not bother you and at what price does it keep you up at night?  Send me an email and let me know.  Brian.kenney@trinitycustomized.com

Many shippers treat transportation as a commodity and buy it on the spot market every day.  In the current transportation market these shippers have noticed that the price of this commodity has continued to go up.   A significant reduction in capacity during the last few years combined with an increase in fuel costs and an increased demand for transportation services has driven the prices up dramatically in the first half of 2011.

Most carriers have benefited from increases in rates and increases in demand for their services.  As a result, carriers have options that they did not have last year.  Carriers can now pick the freight that works best for them from both a pricing and destination stand point.  Carriers no longer need to take “cheap” freight just to get their trucks moving.   If you look at the publicly traded trucking companies you will notice that the majority of them are doing very well right now.  They have been able to partner with shippers that understand the current market and realize that they need to pay for consistent, reliable transportation partners.

Carriers are not the only people taking a stand against “cheap” freight.  Many brokers/3PLs have seen an increased demand for their services and have decided to use their resources to service customers that understand the market and are willing to make a commitment to them and not just shop for the lowest rate on every load.

If you are that shipper that rate shops for transportation every day to get your freight moved you need to ask yourself, “do I want a rate or do I want a truck?”  Many carriers and brokers will still provide you with a rate, but when someone provides you a rate, that does not mean that they can provide you a truck.  If your plan is to go with the cheapest provider every time, you are inevitability going to end up paying more in the long run.  Chances are that a broker will provide you with the lowest rate and take your load hoping to find a truck at a price that allows them to make a few bucks.  If they can’t find a truck they will call you up at the last minute and give the load back to you.  At that point you no longer need a rate, you need a truck.  The majority of people that provided you with rates initially either no longer have capacity for your load or want a higher rate because of the short notice.  No matter what, you are paying more to get the load moved.

Before you contact a carrier or broker about moving your next load, remember that you are looking for a truck and not a rate.  Trucks are required to move freight and rates are just numbers on your computer screen.  The transportation market we are in dictates that shippers need to start treating transportation as a service and not a commodity.   It is important that you create a partnership with your transportation providers.  You have to make a commitment to them at a fair market rate and allow them to service your business.  Saving $5 on a load today is not worth a lack of loyalty from your carrier base.  You will recoup that $5 numerous times through a strong partnership with your carriers.  Carriers and Brokers will take a hit or go the extra mile to service a customer, but they will not to service a rate shopper.   A strong partnership between a shipper and a carrier is based on value and not based on price.  Take the steps to become a preferred customer to your transportation provider before you find yourself without any responding to your rate requests.

“We are very excited to be awarded this opportunity by Tajima Flooring,” shared Brian Kenney, Vice President of TCL. “The initial phase of our contract was to manage an RFP bid process in which we’ve been able to immediately negotiate nearly 16% in transportation cost savings on Tajima’s behalf. In addition to this amount, Trinity’s transportation management system provides additional savings through supply chain efficiency and visibility.”

About Tajima Flooring
Tajima is a global market share leader in high design Luxury Vinyl Tile, Plank, Sheet, and Loose lay flooring products. Tajima is a 3rd generation family business established over 90 years ago. In the US market, we service our clients with warehousing on both the east and west coast maintaining over 1,000,000 sq ft of inventory. Our core end use markets include Retail, Corporate, Healthcare, Education, Sports and Hospitality. All Tajima flooring products are Floorscore Certified meeting the highest environmental standards for indoor air quality and performance. Tajima’s new “Eco Bond” spray adhesive system allows for faster installation, improved moisture production and pH protection plus the ability to use floors the same day they are installed. Eco bond is also Floorscore Certified and is a zero VOC adhesive system. Learn more at http://www.tajimaflooring.com.

About Trinity Customized Logistics
Trinity Customized Logistics is a division of Trinity Transport, Inc. comprised of an experienced team of experienced Trinity professionals that leverage over thirty years of experience in the industry with a web-based transportation management system. Trinity is unique in that it offers complete support for its software, unlike other systems that require large capital expenditures to simply purchase stand-alone technology. Operations are conducted from Seaford, Delaware. TCL was formed initially to address the needs of a select base of core clients, and has since been launched publicly and offered to prospective clients.  In addition to cost savings created by the expertise of TCL’s team, shippers benefit from enhanced visibility and improved efficiency in their operations.  For more information, visit http://www.trinitycustomized.com.

About Trinity Transport, Inc.
Trinity Transport, Inc. is a logistics company with headquarters in Seaford, Delaware. Trinity has regional service centers in Euless (Fort Worth), Texas; Kansas City, Missouri; and Denison, Iowa and operates throughout North America with another 85 independent agent locations.  The company has been one of the top 25 freight brokers in the country since 2003 according to Transport Topics; was designated as a Top Workplace in the State of Delaware by The Delaware News Journal; and was the recipient of the Better Business Bureau’s Torch Award for Marketplace Ethics—just to name a few. For more information, visit www.trinitytransport.com or contact Brandy McMullen at brandy.mcmullen@trinitytransport.com or (800) 846-3400.

If you follow this blog or if you are anyway involved in the transportation process you know that freight rates continue to rise.  Not only are shippers paying a higher fuel surcharge than they did last year, but they also have to pay higher line haul rates.  This is a result of an increase in demand for trucks and a decrease in the supply of both trucks and drivers.  Right now there are fewer trucks on the road than there were last year.  However, carriers have more freight to choose from, which is not a good thing for shippers.  This means carriers control the market and they are doing everything they can to keep it that way.

Even with the increasing demand for trucks, carriers can’t just easily add additional assets to their fleets.   There is a backlog on new truck orders and the priority for most fleets is not adding additional equipment, but replacing older equipment that they held onto during the recession.  Carriers are also working to retain good drivers or to replace the drivers that they lost as a result of CSA.  There is not a surplus of drivers that are just sitting around waiting for a carrier to hire them, so adding additional trucks and drivers is not something that will happen any time soon.

Most carriers are going to do everything they can to maximize the profitability of their fleet with the assets that currently have.  They know if they continue to add equipment to meet demand then they will create a more balanced market and lose their rate leverage over shippers.

So if you are a shipper you have a few options.  You can continue to pay more and more to move your freight, which will probably have a negative impact on your bottom line. At some point you will have to try and pass these costs onto your customers.   However, the better option is to get creative and find ways to become more efficient and find cost savings throughout your transportation processes instead of just trying to reduce your freight rates.   The shipper that can absorb these increases in transportation costs without passing them onto their customers will have an advantage over their competition.

I recommend that you take a look at your processes, technology, and personnel.  If you are doing things the same way you have always done them, than there is probably some room for improvement.  The transportation market has gone through 3 major changes in the last 3 years alone and most companies have had to make significant changes to their processes to keep costs down.

As efficient as most companies believe their processes to be, transportation is generally one area that is overlooked.  Many companies view their freight spend as a cost of doing business and therefore do not spend enough time reviewing their transportation processes.  However, in the transportation market we are in, that cost of doing business is going up and companies can no longer afford to overlook their transportation department.

If the only technology you are using to manage your transportation is a combination of a fax machine, spread sheets, and email, then you probably have some room for process improvement and the ability to at least create soft cost savings.

If transportation is handled by someone who does not have a transportation title such as customer service, sales, or by someone in purchasing, than you probably have some room for process improvement and cost savings.  If you are asking your customer service team to become rate shoppers and handle the transportation, which is a full time job in this market, when do they have time to provide customer service?  When people become over whelmed they are going to try and get things done, not necessarily get them done correctly.  Your company may think that they are saving money because they did not hire a transportation person, but they are most likely costing themselves money because they are not maximizing the productivity of the customer service team.

I would also recommend that companies take a look at the transportation expertise of the people handling their freight.  People only know what they have done or been taught and if the people making transportation decisions for your company do not have a lot of experience or exposure to transportation information outside of your company then you probably have room for improvement.

Keep in mind, there are many 3pls and transportation consultants that can help you and your company create cost saving solutions if you do not have the time or resources to do it internally.