Consider obtaining volume where capacity already exists By Edward R. Hildebrandt, Sr. VP, Operations, ChemLogix Limited truck driver and asset availability is shrinking shipping capacity for many chemical manufacturers. Noel Perry, an FTR senior consultant, noted that the industry is several hundred thousand drivers short of raising capacity to meet demand. Some chemical shippers simply take the route of least resistance and increase capacity by paying more for freight; others may find it nearly impossible to contract new carriers at any price as their competitors vie against them for available resources. One tactic chemical shippers should consider in meeting freight requirements is identifying and adding volume to an existing carrier’s complementary or empty return lanes. Load matching carrier’s or other shipper’s lanes in the opposite or complementary direction can add capacity where it doesn’t currently exist. How can shippers determine where these lanes and volumes exist in the market? Carriers do not readily provide information regarding their freight, either because they fear the information may wind up in the hands of a competitor who will take the business away or they don’t want shippers to force them to run backhaul lanes at backhaul prices. And many shippers do not have the technology or resources to obtain this market information themselves. This is where a third-party logistics company adds value. Knowledgeable about the freight market and supported by transportation management system (TMS) technology, third-party logistics companies can identify available trucking assets in different markets and pinpoint shipper’s freight fits, not just on a aggregate basis, but on a lane specific (original and destination) basis. Then, the 3PL can electronically broadcast logistics requirements to the market to quickly match capacity to shippers’ needs. Without a TMS, shippers would have to communicate to carriers through faxes and phone calls, searching for carrier capacity. Available capacity is left to the chance call and probably would be gone. Backed with market intelligence and the ability to quickly negotiate with carriers, shippers gain a competitive edge to gain load coverage over other shippers competing for the same available capacity. To discuss how this strategy might meet your freight requirements, contact ChemLogix at (215) 461-3805 or [email protected].