Study highlights cost of underutilized truckload space and inefficiencies in LTL shipping

From higher operational costs to increased environmental impact, understanding and addressing aspects to leverage truckload space is crucial in today’s freight market.

A study by Flock Freight and Drive Research investigated costs associated with underutilized truckload space and inefficiencies of less-than-truckload shipping. It surveyed 1,000 transportation decision-makers from different industries, including retail, industrial machinery/equipment, building materials, and plastics/paper/packaging, among others. 

According to the report, 43% of truckloads moved partially empty in 2023, with an average of 29 linear feet of unused deck space. This inefficiency means that one of every four truckloads were moving completely empty, posing a major economic and environmental issue.

The report indicated that in 2023, with the average less-than-truckload cutoff at 10 feet, shippers faced a dilemma of either opting for the unpredictability of LTL services or resorting to shipping with partially filled truckloads to comply with strict delivery timelines.

To avoid shipping partially empty loads, 22% of TL shippers waited to ship until they could fill an entire truckload. Meanwhile, 16% of shippers also booked truckloads “often” or “very often” because they weren’t sure another option would deliver the freight on schedule, and 25.5% “often booked” truckloads because they were unsure another mode or option could deliver freight without damage.

“Historically, the U.S. truckload market has been locked into a binary concept of ‘full’ or ’empty’ when it comes to trailer capacity,” said Chris Pickett, COO, at Flock Freight. “We are challenging both shippers and carriers alike to rethink this.”

With 43% of truckloads moving only partially full, there’s a massive opportunity for businesses to maximize trailer utilization and reduce overall transportation spend, said Pickett, like a shared truckload solution.

While less than truckload shippers may be drawn in by the cost-efficiency, surprise fees and handling risks can cause higher overall costs.

Flock Freight

An ongoing challenge the research highlights are the hidden costs of LTL shipping, with the average enterprise shipper incurring up to $6.3 million annually in damage and loss claims. The average LTL damage rate was reported at 1.94%, with larger enterprises facing higher expenses due to their larger shipment sizes.

Minimizing damage claims enhances customer retention, with one respondent saying, “The likelihood of losing to competitors is reduced by minimizing damage and delays.”

Additionally, there’s other surprise fees, including unexpected accessorial fees such as reweighing, reclassing or overlength fees, that LTL shipments can accumulate. These unexpected fees, which are challenging to budget for, impact automotive businesses the most, averaging $548 per shipment. With enterprise companies the size of $3 billion, this added up to $2.3 million in accessorial fees in 2023.

The study also depicted how shippers are investing in tracking technologies to comply to strict delivery schedules or risk incurring OTIF penalties. With 58% of respondents planning to invest in tracking tech platforms to avoid delays. A survey respondent noted, “Tracking and visibility are top priority so that we can monitor the movement of materials in real-time throughout the supply chain while tracking inventory levels, shipments in transit, and enhancing our logistics capabilities.”

This aligns with the sentiments of several large fleets, such as Landstar and J.B. Hunt Transport Services, which noted in their first quarterly earnings reports priorities to invest in technology.

Simultaneously, the adoption of new digital platforms to support online load bookings have raised concerns on the risk of fraud and theft.

[Related: With a potential increase of cargo theft amid Memorial Day, experts offer mitigation insights]

This was a concern for bigger fleets, too. In an earnings call to analysts, Brad Hicks, president of highway services and executive vice president of people at J.B. Hunt, said, “While technology is a foundational pillar for us, it has opened new avenues for bad actors to engage in sophisticated strategic theft given these organized groups’ access to thousands of loads through our platform.”

Data showed that 89% of shippers were impacted by theft and fraud in 2023, causing a ripple effect, including reduced earnings, unexpected fines and fees, increased complaints, and customer dissatisfaction.

Among those affected by theft and fraud, 13% said they were unprepared, with one survey respondent pointing out, “In 2023, I wasn’t prepared for… significant disruptions to shipping operations and business activities because of the theft of the goods and products.”

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City of Kingston orders two Mack LR Electric refuse trucks

The city of Kingston, Ont., has purchased two Mack LR Electric refuse trucks, the first battery-electric trucks in the fleet.

The trucks are being deployed as part of the city’s strategic plan for 2023-2026, which includes environmental stewardship initiatives. The city says it’s working toward a zero-emission fleet transition plan as part of the program, and plans to be net-zero by 2040.

“Mack is excited that the City of Kingston opted to order two Mack LR Electric vehicles to help assist them in attaining their sustainability targets,” said Jonathan Randall, president of Mack Trucks North America. “Mack offers a total ecosystem of support, from grant writing and infrastructure to financing. We remain committed to helping our customers adopt this zero-emissions technology.”

“We are currently targeting reducing our GHG emissions by 30% by 2030,” added Brent Fowler, director of corporate asset management and fleet for the City of Kingston. “The LR Electric refuse vehicles are one of multiple strategies the city is leveraging to work toward the achievement of these goals.”

The Mack LR Electrics come fitted with automated side loaders (ASL), equipment the fleet is transitioning to in the coming years.

“We are excited for the opportunity to utilize the electric refuse trucks as some of our first ASL vehicles,” said Karen Santucci, director, public works and solid waste for the City of Kingston. “Increased safety for staff combined with a more environmentally friendly truck, offer benefits to both our staff and our residents.”

The city runs 14 refuse trucks, in addition to seven recyclers and two medium-duty packers. It is installing two portable 50-kW Heliox chargers purchased through Mack, and also has a 150-kW DC fast charger to support its transit buses.

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PHMSA proposes increase to hazmat registration fees

Trucking news and briefs for Wednesday, May 29, 2024:

PHMSA proposes to increase hazmat transport registration fees

A Department of Transportation agency is proposing to increase the annual fees paid by carriers who transport hazardous materials.

The Pipeline and Hazardous Materials Safety Administration (PHMSA) in a notice of proposed rulemaking published May 24 proposed what it called “overdue updates to the registration fees under the statutorily mandated registration and fee assessment program for persons who transport, or offer for transportation, certain categories and quantities of hazardous materials.”

The annual registration fee is currently set at $250 (plus a $25 processing fee) for registrants qualifying as small businesses or not-for-profit organizations and $2,575 (plus a $25 processing fee) for registrants not qualifying as a small businesses or not-for-profit organizations.

PHMSA noted that the small business fee has not been raised since it was adjusted to $250 in 2006, and the fee for large businesses was last adjusted from $975 to $2,575 in 2010.

Under the proposal, PHMSA would increase the fee by $125 to $375 for small businesses and non-profits, and by $425 to $3,000 for other registrants — the maximum allowed under federal statute.

The purpose of the registration program is to fund the Hazardous Materials Emergency Preparedness (HMEP) grants program, which supports hazardous materials emergency response planning and training activities by states, local governments, and Native American Tribes.

The 2021 Bipartisan Infrastructure Law increased the authorized funding level for the grants by $18.5 million, leaving PHMSA to need to adjust fees to meet the new funding level. The total funds received from registrants during the 2022-2023 registration year, less processing fees, was approximately $24,662,200, which was short of the federal limitation by more than $22 million.

PHMSA is accepting public comments on its proposed registration fee increase here through Aug. 22.

FMCSA’s Truck Leasing Task Force meeting twice this summer

The task force charged with addressing predatory practices related to lease-purchase programs in trucking will meet twice this summer, the Federal Motor Carrier Safety Administration announced in a Federal Register notice publishing Wednesday.

TLTF will meet on Thursday, June 13, and Thursday, July 18, each from 10 a.m. to 4 p.m. Eastern, with the meetings being held virtually for their entirety.

During the June 13 meeting, TLTF members will discuss whether truck leasing agreements properly incentivize the safe operation of vehicles, including driver compliance with the hours-of-service regulations and laws governing speed and safety generally, and resources to assist truck drivers in assessing the financial impacts of leasing agreements.

A public comment period will also be held during the meeting to allow truck drivers and lessees of trucks to tell their personal experiences with leases and to present any supporting information they would like to share to assist TLTF in making recommendations on such agreements.

The July 18 meeting will primarily cover the opportunity that equitable leasing agreements provide for drivers to start or expand trucking companies and the history of motor carriers starting from single-truck owner-operators. Similarly to the June meeting, a public comment period will be held.

Advance registration is required by June 7 for the first meeting, available here, and by July 12 for the second meeting, available here.

[Related: FMCSA forms task force to review driver lease agreements]

ATRI outlines new research priorities

The American Transportation Research Institute at its recent board of directors meeting in San Antonio, identified its research priorities for the upcoming year. ATRI’s Research Advisory Committee selected a diverse set of topics designed to address some of the industry’s most critical issues, the group said.

The 2024 ATRI top research priorities are:

Mining driver demographic data to identify new pathways to trucking careers. This study will capitalize on ATRI’s extensive truck driver demographic data collected through driver surveys over several decades. The data will be used to identify changing demographic trends in the driver population, allowing the industry to better target driver recruitment and retention strategies, ATRI said. The research will also examine potential pathways into the industry from previously untapped populations, including young adults aging out of the foster care system. 

Update on the impacts of nuclear verdicts. In 2020, ATRI released a study examining the frequency and impact of nuclear verdicts on the trucking industry. That research documented the scale and frequency of truck crash litigation verdicts and explored the growing use of third-party litigation financing. This update will utilize more recent data to examine how verdicts have changed since the initial study, impacts on motor carrier insurance premiums, factors contributing to nuclear verdicts, as well as potential impacts from state-level lawsuit abuse reform legislation passed in recent years. 

[Related: ATA chief takes aim at unions, plaintiffs’ bar and CARB]

Comprehending the scope of cargo theft in the U.S. Cargo theft is a growing issue for motor carriers, shippers, insurers, and consumers. This research will examine existing data sources and work with motor carriers to better quantify the scale and frequency of this often-unreported crime. The research will also examine existing and emerging cargo theft tracing and prevention programs to identify best practices.

[Related: Surge of cargo theft is ‘hitting us like lightning,’ experts say]

Calculating the cost of truck bottlenecks. For the past several decades, ATRI has utilized its extensive database of truck GPS data to monitor and quantify traffic congestion on the nation’s highways. This research will provide a more granular analysis of the cost of congestion for specific bottleneck locations from ATRI’s top 100 truck bottlenecks list, as well as case studies quantifying the return-on-investment for locations where targeted infrastructure improvements have resulted in reduced congestion. 

Federal Excise Tax (FET) cost-benefit analysis. The 12% FET on the purchase of heavy-duty trucks and trailers is considered by many to discourage investment in newer, safer equipment with cleaner engines. This analysis will examine the impact of the FET on carrier decisions to avoid new equipment investment, such as unrealized safety and emissions improvements.

[Related: FET repeal may hinge on truck safety, high ZEV cost and supply chain issues]

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TA purchases support St. Christopher Truckers Relief Fund

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ECONOMIC TRUCKING TRENDS: Competition from private fleets easing

Private fleets have thus far been driving Class 8 truck orders and have been taking more freight in-house to avoid supply chain disruptions they experienced after the pandemic.

However, competition from private fleets appears to be easing, ACT Research reports.

Competition from private fleets easing: ACT

ACT Research reported this week that its For-Hire Trucking Index continues to point toward a slowly recovering for-hire trucking market.

“Evidence and anecdotes suggest private fleets have taken some volume from the for-hire market,” said Carter Vieth, research analyst with ACT. “Given private fleets’ cost disadvantage, and lack of incentive for backhauls, we don’t expect this to last long, and recent Class 8 data suggests private fleet capacity additions are slowing, a welcome sign after an extended downturn.”

ACT’s Capacity Index decreased three points in April, a welcome sign for for-hire carriers.

However, volumes also decreased in April.

“While private fleet competition has weighed on volumes the past few months, it’s not likely to last long,” said Vieth. “Solid performance of rates and the load/truck ratio in the spot market through Roadcheck suggest the gradually improving volume trends will support the market balance in 2024. Overall, the supply-demand balance suggests a market close to the elusive and impermanent equilibrium.”

Shipper conditions improve slightly

Shippers saw a modest improvement in conditions in March, according to FTR, but conditions are set to deteriorate.

FTR’s Shippers Conditions Index improved in March, back to positive territory at 1.2 from -1.4 in February. Stable diesel prices and a slightly more favorable rates were to thank for the improvement.

“The SCI returned to mildly positive territory in March after February’s negative reading that mostly was due to fuel costs,” said Avery Vise, FTR’s vice-president of trucking.

“The next couple of months still look favorable for shippers, but we expect the index to trend toward more neutral and slightly negative readings by the second half of this year due to modestly stronger capacity utilization and less favorable rates. Even so, we expect any weakness in shippers’ market conditions over the next couple of years to be far milder than what they had encountered from late 2020 through the middle of 2022.”

Spot market’s Roadcheck bump could have staying power

Truckstop and FTR Transportation Intelligence saw an increased improvement in spot market rates for the week ended May 24, suggesting the much anticipated Roadcheck bump could have some staying power.

This isn’t uncommon. Truckstop reports rate increases for the week following Roadcheck have occurred every year since the event moved to May in 2021.

“After significant gains in four of the past five weeks, spot rates for refrigerated van equipment barely exceeded those for flatbed equipment – for the first time since the fourth week of this year. Spot rates for van equipment are tracking more closely with comparable 2023 weeks than are rates for flatbed, which – while stable – have not shown any signs of their usual spring peak,” the companies said in a release.

“With a decline in load postings and an increase in truck postings, the Market Demand Index declined to 81.2. While lower than in the prior week, the MDI in the latest week otherwise was the strongest since the first week of 2023.”

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Sixteen migrants found locked in 50 degree reefer trailer at I-19 checkpoint

A U.S.-based truck driver is facing multiple charges after more than a dozen people were discovered inside of a refrigerated trailer he was was hauling at a Border Patrol I-19 checkpoint.

On Thursday, May 29, a semi truck hauling a refrigerated trailer passed through an I-19 Immigration Checkpoint near Tubac, Arizona.

Tucson Sector U.S. Customs and Border Protection (CBP) agents discovered 16 migrants inside the trailer after a canine unit alerted to the vehicle.

“It was set to 50 degrees and locked with no means of escape. The U.S. citizen driver faces criminal charges,” said John R. Modlin, Chief Patrol Agent of CBP’s Tucson Sector.

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Shippers, carriers working together toward sustainability targets

Ikea is a big-time, global shipper and with that comes big-time responsibilities to manage its carbon footprint.

But since it doesn’t run a fleet of its own, Ikea is leaning heavily on its transportation providers to help it achieve its emissions targets. Speaking on a panel of shippers and carriers at ACT Expo, Elisabeth Munck af Rosenchold, global sustainability manager for Ikea, said the company makes 1.7 million shipments a year, emitting about 1 million tons of greenhouse gases.

“That of course gives us a big responsibility, but also the opportunity to positively influence [transportation providers],” she said. By 2040, the company plans to use only zero emissions trucks for its road transport and vessels for ocean shipments. By 2030, it plans to have slashed its emissions per shipment by 70% compared to a 2017 baseline. It’s already achieved a 25% reduction.

“We know we need to do more,” she said.

On the other side of the coin are the shippers who will be counted on by major corporations to help them achieve their ESG targets. DHL Supply Chain has been an early adopter of clean transport technologies. It set out in 2014 to purchase 10,000 electric delivery vans, but was unable to find a supplier who could meet that demand. So, it built its own.

“We still have 20,000 operational today and over 35,000 electric vehicles around the world,” said Jim Monkmeyer, president of transportation with DHL Supply Chain.

Electric terminal tractors

It’s focused mostly on smaller vehicles, including terminal tractors. DHL deployed its first two electric terminal tractors in 2015 and has since deployed 70. It expects to have 100 in place by the end of this year. The company has also deployed electric and CNG-fueled Class 8 trucks.

Likewise, Sysco has aggressive emissions reductions targets. It is looking to reduce its CO2 emissions by 27.5% by 2030; a big undertaking since the fleet has 9,500 Class 8 tractors in the U.S. and another 2,000 box trucks, making it one of the largest private fleets in the U.S.

Sysco has 120 EVs deployed worldwide, including 100 Class 8 tractors.  The largest deployment is at its Riverside, Calif., flagship location where it has 40 electric trucks in operation and 40 permanent chargers installed to support them. Sysco is now turning its attention to its trailer fleet and how that can be electrified.

At Maersk, 140 electric trucks have been put into service to support its U.S. drayage operations. In 2023, they moved nearly 1 million containers, a number that’s expected to double this year.

Alternative fuel supplies

Another large private fleet is that belonging to PepsiCo Foods North America. David Allen is its vice-president and chief sustainability officer. The company plans to reduce its emissions footprint by 75% by 2030, before becoming net zero by 2040. Allen said the company is constantly assessing how it moves its freight – either via private fleet or third parties – to accelerate its decarbonization efforts.

But for fleets, “We’re having to initially make a lot of these investments ourselves,” noted Monkmeyer.

This becomes tricky since regulations and alternative fuel supplies vary across the continent. Sysco fuels 80% of its California fleet with hydrotreated vegetable oil (HVO), something that’s too costly to source in other states.

“If that was an area we were able to take off and expand across the country, we’d definitely take advantage of that,” said Dan Purefoy, chief supply chain officer.

Monkmeyer said DHL is exploring a wide range of options, ranging from EVs to hydrogen and renewable diesel. “We have to, because we don’t know where the market is going,” he added.

Munck af Rosenchold said while shippers’ emissions demands must be “fair” to providers, she also noted, “We do not believe sustainability should come at a premium to our customers. Sustainability should be the default option. It should not be a luxury that only a few can afford.”

Costly equipment

The challenge facing fleets, however, is the zero emission vehicles available do come at a cost premium compared to diesel variants.

“The equipment is much more expensive,” said Maersk’s regional head of customer delivery for landside transportation, Javier Garcia Atique.

Monkmeyer said DHL has partnered with customers willing to share in the investment required to decarbonize their supply chain. The company tracks the science-based emissions reductions targets being tracked by big shippers and approaches those companies with options.

PepsiCo’s Allen said third-party carriers that align themselves with the company’s sustainability objectives could find themselves rewarded with longer contract lengths, or may be able to cost-share charging infrastructure at certain sites.

“We are seeing some good evolution there and also some really good ideas coming out of our supply chain partners,” Allen said.

DHL has begun incorporating emissions data into its bid tools, so it can educate customers on the carbon intensity of their shipments. “That has been eye opening with our customers,” said Monkmeyer. “Several have started to make selections based on that, paying more for carriers that have a lower carbon footprint. Others are eyeing it cautiously, saying ‘I’ll get to that.’”

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Motorcycles slide on potato sludge left on roadway

Police are searching for a truck driver who drove away after spilling potato sludge on a Washington state highway on Thursday. 

The incident occurred on May 30th in Richland, Washington on westbound Interstate 182 at the State Highway 240 exit. 

According to Tri-City Herald, two separate motorcyclists wrecked on the stretch of highway after a semi truck spilled a substance described as potato sludge. The sludge made the roadway slippery, which caused the motorcycles to lose control and crash. 

The drivers of both motorcycles sustained minor injuries and one passenger was taken to a hospital in stable condition. 

The truck driver did not stop following the spill, and Washington State Patrol is asking them to come forward. Anyone with information on the incident is also urged to call 509-734-7034.

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Trucker rescues fellow truck driver from fiery crash on Wisconsin interstate

A semi truck driver who witnessed a crash on a Wisconsin interstate stopped to rescue a fellow trucker before her truck went up in flames.

The crash occurred at 5:25 a.m. on Wednesday, May 29, in Grand Chute, Wisconsin.

Police were called to I-41 northbound near Highway 15 for a reported crash involving two semi trucks.

According to the Grand Chute Fire Department, investigators believe that a northbound truck struck a concrete barrier, causing the the trailer axles to detach and hit another semi truck also traveling north on I-41.

During the crash, one of the trucks slid along the interstate, causing sparks that set its load of paper bales on fire. That truck was destroyed by the fire.

“Fortunately, an uninvolved southbound semi-driver witnessed the incident and assisted the driver out of the semi-tractor before it was consumed by the fire,” firefighters said.

No injuries were reported.

WBAY interviewed truck driver turned rescuer Randall D’Addenzio about saving the female trucker from the cab following the crash. You can view the interview below.

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CBSA strike potentially looms in June

Members of the Public Service Alliance of Canada (PSAC) who work for Canada Border Services Agency (CBSA), have voted overwhelmingly to strike as early as June.

Ninety-six per cent of members voted in favor of job action during votes held April 10 to May 23, the union announced.

“Taking job action is always a last resort, but this strong strike mandate underscores that our members are prepared do what it takes to secure a fair contract,” said Chris Aylward, PSAC national president. “Unless they want a repeat of 2021, Treasury Board and CBSA must be prepared to come to the table with a fair offer that addresses our key issues.”

In 2021, job action by CBSA nearly brought commercial cross-border traffic to a halt before a 35-hour bargaining session resulted in an agreement.

PSAC says its workers have been without a contract for more than two years.

The union says it is seeking: fair wages that are aligned with other law enforcement agencies across the country, flexible telework and remote work options, equitable retirement benefits and stronger protections around discipline, technological change and hours of work.

Mediation sessions are set to begin June 3. The union will be in a legal strike position upon release of a Public Interest Commission report, expected to be released before then.

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