Construction season, which takes place in the warmer months, means that flatbed shipping’s popularity grows. As a result, for small to mid-size shippers, finding and sourcing flatbed capacity becomes increasingly difficult this time of the year.
Thus, due to the seasonal swings and a fragmented carrier base in the flatbed market, many shippers delve deeper into their route guides and often resort to spot market bidding as their route guides are exhausted. This leads to increases in costs as well as more time spent trying to procure capacity.
The Seasonal Swings of the Flatbed Shipping Market
We partnered with Iowa State University to conduct research regarding stale rates in different areas of the truckload market. What we found was that truckload rates fluctuate in response to changing market conditions as carriers have to reshuffle their capacity to align with their customer’s demands, especially in the flatbed market.
The radical seasonal swings and daily changes of the flatbed shipping market are more radical than the rest of the truckload market. This means flatbed carriers are less likely to adhere to route guides and will accept the loads that drive their profitability. It is not uncommon for flatbed carriers to turn down a shipment at their contracted rate, and then accept the same load at a higher price, also known as a spot market bid.
3 Ways to Prepare for Peak Flatbed Season
Let’s take a look at how to source flatbed capacity and ensure route guide slippage isn’t costing you money during popular flatbed shipping months:
- Scorecard Your Carriers. Develop a scorecard that captures your key performance indicators and communicates the expectations back to your providers. Scorecarding holds carriers accountable for their overall performance; this leads to better route guide compliance, reduced spot quote activity, and maintains costs when you need it most.
- . Maintaining strong relationships with the carriers who handle the majority of your flatbed shipments is important, but rather than maintaining 20-30 additional carriers for a small percentage of your freight, consider utilizing a third party logistics (3PL) provider. Choosing a 3PL to source your flatbed capacity needs and manage the carrier contracts including auditing the ever-changing insurance, government compliance, and DOT safety laws can save you time and money. It can also insulate your company from the risk associated with maintaining those carrier contracts.
- Reduce Your Lead Times. According to a study carried out by the MIT Center for Transportation & Logistics, the longer time period between a freight tender and actual shipment date, the less expensive the rate. Having adequate will increase your route guide compliance as carriers are positioning trucks well in advance to align with future opportunities. Flexibility with ship or deliver dates will make your freight more attractive as well. Try to avoid struggling with inconsistent inventory and just in time orders, especially when capacity is in high demand.
Taking steps to ensure you consistently have flatbed capacity ensures your goods reach your customers no matter the market. The most valuable thing you can do to prepare for peak flatbed season is to perform annual procurement exercises, as they promote strategic relationships with carriers and result in lower costs overall.
Learn more about how to optimize your flatbed shipping processes for success during peak season.