There’s a saying, “Everything is bigger in Texas,” and a lot of people stand by the belief that bigger is always better. In the freight industry, however, this isn’t necessarily the case. LTL pricing is partially based on contracts that allow for a certain amount of space used in the carrier’s trucks. If you have multiple pallets that all add up to a lot of truck space (about 12 feet, or six standard pallets), you will probably need a volume quote. But if you’re shipping a 16ft. lead pipe, it doesn’t seem fair to have to pay for the full capacity of those 16ft., especially when the diameter of your pipe is only five inches! What do you do when you have just one item that is really long but won’t take up much width within the truck? Here at FreightPros, we encounter that question pretty frequently, so this blog is long overdue. (I won’t apologize for my horrible puns. You can’t make me!) Jokes aside, there are numerous accessorials (AKA additional services) that the LTL industry has to offer. The service in today’s spotlight is called “Overlength/Overdimension.” This is an accessorial that you can select when you have an individual piece that is really long but not very wide. As with any special service, there is an additional charge for overlength. However, paying for overlength on a single piece can often be cheaper than a full volume quote. Volume v. Overlength So how do you know if your shipment needs a volume quote, or just an overlength service? Most LTL carriers actually have two space limits that they base their pricing on: an LTL Limit and an Overlength Limit. The LTL Limit applies to shipments that will take up a full 12 feet or more of trailer space, and these shipments require a volume quote. The Overlength Limit, on the other hand, applies for single pieces that are long but won’t take up much of the trailer’s width. Usually the Overlength Limit is a few feet shorter than the full LTL Limit. This means that even if a shipment doesn’t go over the LTL Limit it could still have a piece that goes over the Overlength Limit, so you would need to include the overlength accessorial to ensure that you get an accurate rate. Packaging Matters! Remember that carriers apply overlength services per piece. Two loose pipes that are overlength will get you two overlength charges. However, one bundle of five overlength pipes will only incur one charge, because they are all packed together as one item. It’s the ultimate group discount! If you are shipping multiple overlength items that are packaged separately, it’s a good idea to reach out to your freight broker to ensure that you are getting the most accurate rate possible, since multiple overlength charges may apply. Help! How Do I Know if My Shipment is Overlength? If you’re not sure if your shipment is considered overlength, reach out to your freight broker! Any broker worth their salt should be able to assist you. A good rule of thumb is to reach out to your broker any time you have a shipment where an individual piece is over ten feet long. Your broker should be able to tell you what the rules are for each particular carrier and whether or not an overlength service is needed. Adopting this practice and learning these rules will help you proactively avoid delays, as well as unexpected additional charges on your invoices! Keep it up and it won’t be long before you become a freight expert! cc image courtesy João Trindade via Flickr
Make your service offering something that your employees can really be proud of. Wow, re-reading this first sentence, I realize there isn’t anything really revolutionary there. However, I think it is really important for management to really dig down to the core of a company’s service offering and figure out if their offering is something that their staff is going to enjoy selling/supporting, etc. If not, it is going to show and the end consumer is going to be disappointed in what they are purchasing and not only sales will decrease in the long run, but your team is going to be alienated as well. I had already written a lot of this post before the holiday, but yesterday I was with the family watching National Lampoon’s Christmas Vacation (for probably the 40th time in my life), and Clark’s boss Mr. Frank Shirley couldn’t have summed up my thoughts on the topic any better. After being kidnapped by Uncle Eddie and learning how powerful an effect a business decision had on his employee Clark, Mr. Shirley (played by Brian Doyle-Murray) states: “Sometimes things look good on paper, but lose their luster when you see how it affects real folks. I guess a healthy bottom line doesn’t mean much if to get it, you have to hurt the ones you depend on. It’s people that make the difference.” I recently traveled to a destination wedding from Austin, TX through Denver, CO to Salt Lake City, UT and back. I traveled on one of the smaller airlines that has a major presence in the Denver area. This was my first time flying this carrier and there were two distinct service tactics that left me with a bad taste in my mouth. The worst part is that it was obvious from the tone of voice and body language of their service staff and flight attendants that they didn’t really buy-in to what they were offering or how they were operating either. Service Offering 1: This carrier has a strict carry-on policy. But this was unclear during the check-in process. Its obvious now with some carriers that you are going to be paying extra for almost anything you take on the plane, but this carrier couldn’t have been less clear. Basically at the gate, they made an announcement that if your didn’t have a “carry-on” stamp on your ticket you couldn’t carry anything on that didn’t fit in that standard luggage sizing contraption that sits at the gate of nearly every major airline. Now most of us know, that almost no carry-on’s fit in that thing, but in general it is not an issue and if a piece of luggage doesn’t fit in the sizing tool…no worries, it usually fits in the overhead compartment anyways and if not, they will check the bag. The gate attendants were forced to measure every bag and there was some mild amusement that ensued as a travelling companion in our group had to remove items from his carry-on to get them to fit, to avoid paying an additional fee. He subsequently re-packed those items after “passing” inspection. There were however several travelers whose bags were an inch or two too long and had to pay an additional fee (I think it was around $25). This happened at almost every leg of our flight and every time, the passengers were distraught and didn’t hesitate to give this airline’s employees an earful. They were met with lots of shoulder shrugs, “it’s our policy”, and “you’ll have to bring that up with a manager” type of responses. For each leg of our flight, when this song and dance started you could see that the airlines workers knew what was coming. I can only imagine them repeating this process 10-15 times each day for all of the flights they move through the airport. Nobody likes getting verbally abused as a standard part of their job. These employees were essentially hand-cuffed by management’s decision to enact a new policy that was clearly there to drive bottom line results but deteriorated the overall customer experience and didn’t allow their service team to effectively leave the customer happy. Service Offering 2: We were unbelievably “lucky” on every single one of our flights on this trip. On all four legs we were “randomly” selected to a credit card offering from the carrier. The carrier pitched a credit card for their airline for what seemed like 10 minutes on each of these flights. If only we signed up on the flight, we’d get an additional 40,000 frequent flyer miles. I felt bad for the flight attendants in this case. I’m sure they didn’t sign up to sling credit cards to passengers that generally have no interest in their offering. It was almost comical every time they started their pitch as they tried to convey the enthusiasm for our flight being lucky enough to have been selected for the limited offer. I bring all this up, because we work in an industry that is fraught with challenges for our employees. They work with imperfect information on a daily basis to try and get a perfect result for our customers. Whether that be in an on-time delivery, a freight claim approved, or clarification on a billing discrepancy. We’ve battled these challenges primarily in two ways. We’ve focused on building an internal culture of teamwork and support. And secondly, we’ve focused on developing a freight service offering that all of us can be proud of. Our employees are not just going through the motions when talking about what we’re going to do or offer our customers. They believe in the processes and systems that they themselves largely helped to create and know that our solutions will be of real value to the customer and keep them satisfied and a return customer to us. If management had some hair-brained idea that only tried to drive profits (like the airline that is charging for marginally large carry-ons at the gate), but didn’t fit our culture and lowered the overall experience for not only our customers, but also our employees, then they are empowered to point this out quickly and identify the need for change. My experience with this airline only solidified the idea that every system and process we roll out, not only has to have a business function, but a function that works within the expectation that our freight customer’s expect and backed by the buy-in from our employee base that it fits our team culture and is something that will allow them to continue to proudly deliver the best freight solutions possible. The only possible way to do this is to get input from every level during the development of a new service or process and figure out if a solution will truly work for all the key stakeholders involved. Otherwise, there will be a disconnect, whether from your employees or your customers, and you’ll have a bunch of unhappy flyers, like me, looking to choose another airline next time around.
In the first portion of this two-part blog post regarding my arguments on how freight shipping is not a commodity, I focused on the service side of things and the people and team dedicated to providing additional value on a company’s freight moves. In this section portion, I wanted to address the latter half of of the definition of a commodity regarding fungibility. “A commodity has full or partial fungibility; that is, the market treats its instances as equivalent or nearly so with no regard to who produced them.” I’d like to relate this concept of fungibility to the LTL freight carriers directly. Unfortunately the viewpoint is all too common that all of these carriers are essentially created equal. Trucking companies are not commodities. These carriers simply move your freight from pickup to destination and the major difference between the carriers is the freight quote variance depending on the lane serviced or type of goods being moved. This may be the perception, but the reality is startlingly different. Its an unfortunate fact that quality information about the LTL carriers is difficult to find online. There are several reasons for this lack of information related to LTL carriers and their service. For starters, many carriers perform at greatly inconsistent levels depending on the lane being serviced or the type of freight being moved. We have some carriers in our system that perform amazingly well for certain customers, and very poorly for others. This could be due to management at a particular terminal, capacity (shortages or overages), the route that a customer is on, etc. We have our own internal scoring system for carriers, and there are many times where the worst performing carriers are some of our customer’s favorite to work with. They’ve just had quality experiences with them and have no reason to look elsewhere. Othertimes, we’ll run into potential customers that “hate” a carrier or two that we love working with internally and have had great success across our system with the thousands of shipments we move each month. The other major reason that there isn’t a lot of transparency related to the carriers and their offerings, at least from the broker side of things, is that a broker has to be very careful about maintaining the quality of the relationship with each of the LTL carriers that they choose to work with. Unlike truckload shipping, where there are tens of thousands of carriers out there, the LTL side has 50 to 60 legitimate carriers to work with. Of course, a quality broker will stop working with a carrier that is truly an awful partner from a service level perspective, but there probably not going to issue a press release espousing the reasons they are no longer working with a carrier. Nor am I going to write a blog post publicly listing our scorecards for the different carriers. A web search will typically only produce some lists of LTL carriers listed by revenue, and almost no qualitative information. The reality is, that different LTL carriers work better for some customers than others. What’s the solution? Talk with your broker or a potential broker about your freight and get really detailed about what’s important to you. We have certain carriers that are awful about on-time deliveries, but they might cost 20-30% less on average. Some freight isn’t time sensitive, and if yours fits that bill, then one of those carriers might be a great option for you. We have other customer’s whose freight is so critical that one day of delay can cost them hundreds of thousands of dollars. So we have to figure out the best mix of carriers that service their lanes at the highest on-time percentage as possible. After giving the detailed input about your freight requirements to your broker, they can select a proper carrier mix for your freight, and then most importantly, carefully monitor the freight shipments they are moving for you and add/subtract carriers as appropriate. Beyond just on-time delivery, a reputable broker will be able to analyze how many pickups are missed, what % of shipments are getting additional charges, what carriers service your destination locations each day of the week, and how many claims are being generated by the carriers you are choosing. Setup your own internal scoring system if you don’t use a broker that can do these services for you. Here’s a great article on some of the things to think about. By working with a broker that throws that fungibility argument out the window and realizes that all carriers are definitely not equal, and more importantly that each carrier individually is going to operate differently for each customer, you can really get the benefit of a consultative approach to maximizing the efficiency of your freight shipping and align your company’s goals with carriers that can meet or exceed them.
Over the past year I’ve met with multiple Presidents of other freight brokerages and have had heard the same theme ringing through regarding freight services as a whole. That the services we provide for people’s freight are essentially a commodity. One President told me something along the lines of, “We’ve accepted that LTL freight shipping is a commodity and we treat it as such. We just give the lowest pricing possible to our customers and let them handle the service side of things.” I couldn’t disagree more with this viewpoint, however I do think many shipping customers in the marketplace may view freight shipping, and particularly the LTL side of things as a commodity because they’ve not yet worked with a broker that has provided services and delivered soft-cost savings that they didn’t realize were even an option. Let’s grab a definition of a commodity (pulling from Wikipedia here, which I’m sure was pulled from somewhere else), “It is used to describe a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market. A commodity has full or partial fungibility; that is, the market treats its instances as equivalent or nearly so with no regard to who produced them.” Tackling the first part of the definition, we know there is huge demand for freight services, literally hundreds of billions of dollars of domestic US transactions each year. The crux of the commodity argument is that these services are being supplied without qualitative differentiation across the market. From an outsider’s perspective or from a shipping customer that hasn’t worked with a service oriented broker or carrier this may be the case. Its logical to think that a truck is going to move your goods from point A to point B, and in a relatively standard amount of time. In fact this is usually the case. However, there are so many working parts that go into each freight transaction, that we as brokers are given the opportunity to shine and add extreme value to the customer who’s goods are moving in that transaction, that the commodity argument starts to fall flat on its face. And only at a point in time where all brokers and carriers are going above and beyond and delivering the maximum amount of soft-cost savings, will the commodity argument truly fly. Logan, from our account management team, is a few days away from releasing a series of blog posts on what services a quality broker should be supplying to its customers, so I won’t go into extreme detail on each of these, but if you are moving your goods and not receiving the following services from your carrier or broker, you are in fact choosing an inferior level of service and if your freight decisions are based purely on price, then you might be making the mistake of treating freight as a commodity:
- Online Freight Quoting Automation and Transit Time Estimates from Wide Diversity of Carriers
- Pickup Tracking
- Delivery Tracking and Delay Notifications and Resolutions
- Billing Auditing
- Consultative Freight Optimization Services
- Carrier Scoring
- Engaged Sales/Support/Account Management Team
Hey blog readers, I thought I’d post the letter we sent out to our current customers today regarding the re-brand from Meridian to FreightPros. Its official and we are EXCITED! Look for so much more to come from the team in the coming months and years! Dear Current Customer, I’m excited to announce that as of today, Meridian Logistics is formally transitioning our brand and company name to FreightPros. A lot of thought and effort has gone into this decision, and our team strongly feels that the FreightPros brand best represents our company now and the vision for the future as we continue to grow and move forward. Why are We Becoming FreightPros? As a team that works extremely hard for our freight customers, our freight carriers, and is constantly striving to improve on both the customer experience and our own internal processes, we’ve come to really think of ourselves as true freight professionals. We service freight, sell freight, educate people on freight, and the FreightPros name just really encompasses who we are, and addresses what all of us here do in some aspect on a daily basis. We also really want to drive home the fact to each of our customers that we as a team are committed to ensuring that we approach the business of freight in the right way, a professional way. Understanding the specific needs of each customer, and committing to building an internal culture of smart, hard working problem solvers that care about and support each other as well as the customers they build meaningful relationships with. Very little is changing on the backend of our business due to this shift. The people and teams that have supported you and your freight as Meridian Logistics are all still intact. However, the front end experience is definitely going to continue to improve and evolve over time and at a much more accelerated rate with our new website at FreightPros.com. We’ve built a new site that really showcases our employees and gives a bit more insight into the daily work we do. Additionally, we’ve noticed there’s a huge lack of freight information out there geared toward freight shippers, so we decided to go ahead and start creating really informative content via our blog, online demos, and short videos designed to help our customers make the smartest shipping decisions possible for their business. What Else Do I Need to Know? You can start logging into your current TMS account at FreightPros.com today. In a few weeks, we will start redirecting traffic from meridianlogistics.com to FreightPros.com. The backend TMS software is not changing at this time, so all of your current and historical freight history remains safely in place. You’ll notice that the staff you work with here is going to now be using an @freightpros.com email. All of the old email addresses will forward to these updated addresses. In terms of billing, we are not changing our legal structure from Meridian Logistics, LLC, but we will be operating as DBA FreightPros. The billing info will start arriving to you with a FreightPros remit to address in the coming weeks, although we can still apply payments written out to Meridian Logistics. As part of our re-brand, a lot of our social accounts are moving as well. In terms of the most important ones:
- Our Facebook page can now be found at Facebook.com/FreightPros
- Out Twitter account is now @FreightPros
- You can subscribe to our blog’s RSS feed at http://feeds.feedburner.com/freightpros