Controlling freight costs

Have your recent invoices left you scratching your head wondering why your freight costs have increased, especially since the new year started? Fuel prices have been pretty stable and we certainly have seen worse, so what gives? Two words can easily explain what is going on: Driver Shortage. Almost everything we buy comes on a truck. The American Truckers Association (ATA) reports that 70% of all goods sold in America gets delivered by a truck. Our economy is booming, and people are buying more goods, which is putting more pressure on freight carriers to move it. At the end of 2017 the ATA estimated that it needed to add 90,000 drivers per year to keep up with the demand. Exacerbating the issue was the mandated implementation of E-logs in December 2017 for all drivers. Gone are the days drivers could pull out a few more hours, not accounting for hours being stuck in traffic or weather delayed. https://www.npr.org/2018/01/09/576752327/trucking-industry-struggles-with-growing-driver-shortage

There is an interesting dynamic at play in this industry as well, which creates a Catch 22 situation. When unemployment increases, we see more people entering the trucking industry as manufacturing or construction jobs dwindle. It’s a fairly stable industry that can be easily entered with a CDL. The flip side, however, is when the economy improves many leave the trucking business for the better work-life balance afforded by those construction or manufacturing jobs. To combat these issues trucking companies are offering nice sign-on bonuses, better wages and flexible schedules, all of which is adding cost to the equation.

At Briess we strive to make sure our customers have the best experience possible. We continually look for the best options for our customers that help assure the safe, quality, timely and cost-effective deliveries you all expect. Over decades of service to our customers, Briess has developed relationships with an extensive list of bulk, full truckload, less than truckload and volume carriers to help give our customers the best options. While these increases may be unavoidable, discussing all your freight options with your Division Manager may help you control freight costs better.

Posted in Ordering & Shipping, The Briess Beat.
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