Dealing with the pressures from the ever-changing supply chain and transportation industry takes a specialized approach to freight management and shipping. In times like these, dedicated freight solutions can have a tremendous impact on both forward and return logistics, impacting everyone from hybrid freight brokers to shippers to carriers. Recent pressures that started with the COVID-19 pandemic and continue today with economic and manufacturing forces shape businesses big and small looking to gettheir products from Point A to Point B. Dedicated transportation services can make it easier to track, manage, and capitalize on every truckload and every shipment—regardless of whether a trucking company deals with specialty products or faces unexpected spikes or crashes in demand.
Dedicated freight solutions can improve all manner of distribution and shipping needs, particularly for those that rely on fast and timely deliveries. According to a Forbes report, “manufacturers providing food products to groceries have transportation volumes that have surged in parallel with their sales, while food distributors who sell to restaurants have had their volumes plummet. And further adding to the complexity, some conglomerates have some health-related product lines surging, while others have plummeted.” Dedicated management transportation suppliers need to deal with this volatility and be prepared to respond to whatever the current market brings to bear. That is the power of dedicated truck shipping in the modern supply chain and is why dedicated freight solutions are vital to shippers today who want to keep these supply chain champions on call.
What Is Dedicated Transportation?
So, while it is pretty evident that the past supply chain and transportation and shipping practices have seen massive disruptions over the last few years, the concept of dedicated freight solutions is still a bit of a mystery to many shippers. In a nutshell, dedicated freight solutions are offered to shippers by dedicated providers specializing in custom freight transportation considerations. These providers are contracted by individual shippers and companies and offer quick and consistent capacity for their shipping requirements. Selecting dedicated driver pools, available through a hybrid broker, and setting up contracts with carriers partners make it easier for shippers to set up and maintain a fleet tailored to all unique shipping and handling services needed. Dedicated transportation solutions help keep shipping businesses on the move and help keep more trucks on the road.
These services are focused primarily on making it possible for shippers to eliminate the need to micromanage and control an in-house fleet. Even when only a few load types and shipping modes are needed, in-house transportation services can be costly, which is why the need for dedicated freight solutions is more critical than ever during this time of recovery. As highlighted by Supply Chain 24/7. “Consuming anywhere from 10% to 12% of the typical company’s revenues, it’s a big line item that’s still often managed and orchestrated through a combination of Excel spreadsheets, emails, and phone calls.” Innovative new processes and approaches can reduce these costs and put more money in the pockets of shippers through innovative transportation arrangements.
Dedicated truck shipping and freight transportation services also provide shippers with a range of critical benefits, including:
- Assured Capacity Access – A dedicated fleet of pre-vetted drivers allows shippers to accept loads and make shipments with a greater degree of confidence and certainty. Rather than worrying about how many trucks they have available and struggling to find drivers, it is all taken care of for them.
- More Predictable Shipments – With dedicated access to drivers and trucks, capacity is less of an issue, and shippers can offer accurate ETAs to customers more efficiently. Dedicated loads can be arranged easily and scheduled ahead of time, reducing all the legwork involved with each load.
- Specialized Transport Services – With more accessible capacity and load management, dedicated freight solutions make it easier for shippers to provide specialized services. It can all be easily managed with a reliable fleet on-call, from oversized and heavy loads to hazardous and specialized freight.
- Competitive Shipping Rates – Dedicated transport services make for an overall more streamlined and better-organized shipping process that allows for faster response to market shifts. Adjusting freight fees and responding to rate increases can help shippers keep prices lower for customers.
- Higher Profits and Lower Costs – Another benefit of the trucking industry having access to dedicated drivers is how much it can reduce operational costs and fees for shippers. Boosting profits by lowering costs can go a long way in helping shippers and carriers alike grow and profit from the partnership.
Why Dedicated Freight Solutions Are In-Demand
Since early 2020, the freight market has looked more like a fight to the death among carriers and drivers as they struggle to allocate capacity and keep trucks full and on the road. Gone are the days of the supply chain simply resembling an orderly flow of goods along shipping lines, moving from one transportation service provider to the next. Instability and disruption are everywhere and undermine the efficient flow of goods, despite all the best efforts to be prepared for any possible disruptions.
For many shippers today, operating an in-house fleet is simply too expensive to keep up with all the added work and the risks involved, making dedicated freight solutions all the more desirable.
Supply and demand shocks and shifts are some of the biggest reasons supply chains break down and why the pandemic-related disruptions often have such devastating effects. A supply chain shock can be something as simple as a supplier delivering goods late or, even worse, not delivering them at all — something that seemed to become the norm through 2020-2021. A demand shock can be a sudden surge or decline in demand for particular goods. Examples include an increase in demand for masks and hand sanitizer, while fuel costs swung and ticket sales for social events plunged.
These shocks and disruptions could have been at least partly mitigated had dedicated transport services been fully implemented throughout the supply chain. As Inbound Logistics pointed out in 2021, “Supply chains break down in the face of external shocks either because of an inability to foresee change, or an inability to adapt to it, depending on how quickly that change can harm their business.” Those shocks and unexpected disruptions can be more easily mitigated with better insight into market trends and having access to a dedicated pool of skilled and experienced drivers to manage trucks and coordinate loads.
Dedicated freight solutions are all about considering the benefits of dedicated transportation options to help shippers understand the value of dedicated freight transport and shipping services. Partnering with 3PL service providers like AMX Logistics can greatly impact shipping services. Here are the top driving forces behind the growth of this innovative approach to freight solutions in the current market and why shippers are ready to find dedicated loads and partner with out-of-house fleets today.
E-Commerce Expansion
One of the driving forces behind the push for shippers to implement dedicated freight solutions is the growth seen with e-commerce shipping. While buying goods online has been gaining popularity over the last decade, the shutdowns and supply chain disruptions caused by the global pandemic cause an explosion of e-commerce sales and shipping needs. Having dedicated transportation solutions and drivers on hand during post-pandemic recovery has made it easier for shippers to keep pace with this demand. With the popularity of online shopping, fast delivery, and customized shipping options only rising along with other e-commerce trends, shippers must keep up and satisfy customer demands.
By working with a broker who supplies reliable services and committed fleet access, shippers can more easily capitalize on loads availability, keep trucks full, and avoid costly shipping delays and errors. As Logistics Management experts point out, “by offering predictability and ensuring consistently high service levels, dedicated fleets enable organizations to grow relationships with their most valuable customers while protecting against volatility in the open freight market.” Dedicated freight solutions allow shipping service providers to grow and remain profitable while still providing the highest level of services to their customers. Accounting for the rise in e-commerce shipping needs is vital for maintaining high levels of growth and success in today’s digitally-focused market.
Container Shortages
Dedicated freight solutions can make it easier for shipping and transportation companies to overcome significant disruptions in the supply chain, such as the current issue of significant container shortages and shipping backlogs. Due to delays with cargo getting picked up at airports, ocean ports, and other distribution centers across the country, unprecedented bottlenecks and trucking slowdowns occur throughout the supply chain.
As containers sat idle, waiting to be picked up and carried on the next leg of the delivery route, this led to significant shortages of shipping containers. Shippers are having a more difficult time than ever dealing with capacity crunches and finding drivers who have available space for their loads.
Dedicated transport partnerships help shippers avoid this dilemma or, at the very least, goes a long way in softening the impact. Dedicated freight transportation fleets allow shippers to plan loads and confidently navigate congested shipping routes and lanes. They can rest easy, knowing their cargo is already taken care of and there is someone on hand to accept their loads from the point of origin to the final destination. Improved shipping and confident driver scheduling are just some of the ways dedicated freight solutions can help companies overcome container shortages. Brokers can help overcome supply chain bottlenecks by giving shippers built-in access to containers through partnerships with dedicated drivers.
Labor Shortages
Along with helping shippers more efficiently deal with container shortages, dedicated freight solutions can also help soften the current driver shortage’s blow on the industry. According to FreightWaves, “today, the focus is on drivers. Within the current environment, where high-quality drivers capable of representing your brand are at a premium, driver quality is key to the success of a dedicated fleet.” It might be easier to simply lease trucks and find someone to drive them in some cases, but the ultimate goal of fast, safe, and reliable shipping must be recruiting and retaining quality drivers. Any ole driver will not do as it takes skills and experience to handle the vast array of shipping needs and disruptions that the industry faces today.
A dedicated truck shipping provider can obtain this required level of support and service by using supply chain 3PL technology and partnering with dedicated driver teams. More drivers are retiring from the industry, and fewer new drivers are entering, creating an ever-growing driver shortage.
Add several industry-specific issues that companies face, and turnover can be even more drastic. Dealing with driver shortages and related transportation issues is easier to manage with dedicated freight solutions. Having on-demand access to skilled and experienced drivers helps shippers guarantee on-time delivery of orders with the added promise of safe and reliable transportation.
Rising Fuel Costs
Dedicated freight solutions and tapping into a dedicated team of drivers anytime there is a need can help shippers better budget fuel costs and make it easier for them to keep prices more competitive. Freight rates and fees associated with shipments often end up higher than initially budgeted. This often is a result of higher driver rates and surcharges those shippers pay. When facing a shortage of drivers to take loads, shippers often are forced to pay higher rates and fees as a result. This eats into budgets and profit margins and often causes shippers to increase rates and fees for the customers during the busiest parts of the driving season.
Dedicated transportation services help shippers keep costs low by lowering freight fuel costs. When shippers know who they are using for shipping and cargo hauling, they can lock in cheaper rates because they are not at the mercy of current supply and demand fluctuations. They know who their driver team is, what rates they are currently charging, and have the relationships necessary to negotiate if and when required. Having a mutually beneficial relationship with a committed fleet of drivers is another example of how dedicated freight solutions are improving shipping services and helping companies overcome rising fuel costs and related expenses.
Growing Driver Wages
Any shipper operating in today’s volatile market conditions and uncertain economy is well aware of the growing focus on driver wages. As debates continue over how to compensate drivers for their vital services and what pay rate and compensation is appropriate, opting for dedicated freight solution partnerships with dedicated driver teams can help keep pay rates and wages fair across the board. As highlighted by SupplyChainBrain, “while companies increased pay tremendously during the pandemic, with bonuses and 25% or higher pay rate increases, truck driver salaries haven’t always kept pace with the times. In fact, today’s truck drivers earn 40% less than their counterparts did in the 1970s.” To fight off future capacity crunches, trucking companies need to work on driver relations as many still rank pay as a top industry concern.
Dedicated trucking solutions can help improve driver pay and work schedules by establishing pre-approved pay rates and methods, whether flat rates, per-mile, or hourly wages compensation. Having a dedicated fleet of drivers ready to go gives shippers a competitive advantage in the driver wage debate. They can quickly negotiate and set up terms with their drivers, ensure that they are satisfied with their level of compensation, and can plan for costs and adjustments with dedicated freight solutions already implemented.
Seasonal Weather Influences
Dedicated freight solutions and fleet services can help shippers better plan for season weather issues and disruptions. From the most predictable problems such as hurricane season or winter blizzards to the less predictable issues of localized flooding and roadblocks, a dedicated team of drivers can make it easier to overcome obstacles such as these.
Shippers can more quickly and confidently respond to weather-related delays and disruptions by utilizing dedicated driver solutions. It improves overall flexibility and scalability and impacts shippers so they can promptly and efficiently respond to expected and unexpected issues caused by the weather where loads originate and where they are heading.
Rather than scrambling last minute to find drivers to help move cargo around obstacles or avoid lengthy delays, they can simply pull from their pre-vetted pool of dedicated fleet drivers. Capitalizing on the flexibility and adaptability provided by dedicated freight solutions and on-call driver access allows shippers to operate confidently.
Routes can be quickly adjusted, and new drivers sent in to help get loads through problem areas. It also allows for more reliable scheduling and ETA predictions, even for long-haul shipments. From start to finish, dedicated fleet services help shippers be more efficient, transparent, and proactive regarding shipping delays caused by weather-related issues.
Regulatory Changes
The final example of why dedicated freight solutions are becoming necessary in today’s volatile shipping and transportation market is the seemingly continual addition of new regulations and protocols. From changes to how shipments are weighed and loaded to issues regarding driver’s hours and rates, and issues with freight terminal access, things are constantly changing within the industry.
Fuel costs and driver wages are changing, as are the requirements for long-distance and international shipping services. It can be challenging for management to keep up with various changes and regulations. However, dedicated fleet drivers know the ins and outs of what is involved and can ensure that every load is compliant and that every trip abides by all necessary regulations.
By partnering with dedicated trucking companies and tapping into dedicated driver pools and vetted experts, shippers can spend less time fretting over what recent regulatory changes might have occurred. Their drivers can manage that aspect of transport and ensure all necessary papers and documentation are on hand. They can also deal with any minor issues that come up during shipment.
Dedicated freight solutions help keep the flow of goods moving as smoothly as possible by streamlining the entire process. Rather than logistics managers and shipping managers spending countless hours stressing over the details, letting the skilled and experienced drivers take charge where possible keeps the entire process well-organized.
Stay Future-Ready With Dedicated Truck Shipping Through AMX Logistics
Dedicated freight solutions have forever transformed how the modern shipping industry operates for the better. Changes to logistics and transportation services have changed in many ways over the past few years, and the changes will likely keep coming for the foreseeable future. Everything from truck driver shortages to debates over driver scheduling and compensation adds to the already volatile status of the market today. Dedicated transportation solutions are in demand and have become a vital asset of the modern supply chain network. Partnerships between shipping companies and fleets that provide dedicated transportation services are a critical piece of the puzzle that is affordable and profitable transportation and shipping services.
Shippers need to have easily accessible driver pools to pull from and a dedicated fleet looking to find dedicated loads. Dedicated truck shipping and driver pool access can make all the difference in the world in terms of shipping services, customer satisfaction, driver retention, and bottom-line profits. Be future-ready by partnering with the industry expert today. Request a quote for dedicated transport with AMX Logistics to get started and take advantage of dedicated freight solutions today.
