The State of Freight and What it Means for Your Ecommerce Business
If any part of your business deals with freight, chances are you are feeling the same pinch we are at EcoEnclose. With both our incoming materials and our outbound shipments to our customers, we are seeing:
- Significant delays of shipments, with shipments arriving many days past carrier estimates. We are seeing inbound shipments that stagnate with no movement for 1-2 weeks, and arrive to us up to three weeks late.
- "Guaranteed" deliveries are also not arriving on time. And no longer are carriers honoring their guarantees with full refunds.
- Nearly impossible these days to change destinations mid-shipment
- Higher levels of damage and mishandling of goods. There is a misconception that freight orders arrive in better condition than small parcel shipments sent via UPS, FedEx or USPS. This has never been true, but these days damage rates are much higher than ever.
From our experience, it seems that no carrier is immune to these issues. We’ve experienced them with UPS Freight, Saya, Estes, XPO, TForce Freight, R+L Carriers, Reddaway, Holland and more.
Why Are These Trucking Delays Happening?
Driver shortages are the number one issue. Lack of drivers has been plaguing the freight industry for several years, as a high percentage of drivers are retiring and new drivers are not entering the industry as quickly as they are aging out. Today, the situation is even more difficult as so many have left the workforce across all industries and are not yet returning. While the US’s weekly unemployment supplement is set to expire on September 6th (suggesting that a reversal of worker shortages will soon), concerns about the Delta variant are increasing each day so it is difficult to predict how Q4 will unfold. LTL carriers are certainly increasing compensation and benefits to help make driving an attractive career choice for those reentering the workforce.
Compounding the driver shortage issue is the fact that overall demand is growing rapidly. May 2021 data from Cass Information Systems shows the highest-ever growth rates in the freight shipments and expenditures in more than 30 years (May 2021 was 35% higher than May 2020). In fact, May 2021 was 3.3% higher than May 2019, meaning that freight has quickly grown past its pre-COVID levels.
Terminals are also understaffed and some have had to shut down due to COVID cases or data breaches.
Finally, carriers are suffering from their own equipment shortages as fewer trucks were purchased during COVID declines.
Carriers have responded to these challenges by raising rates, extending delivery times, eliminating certain services, eliminating routes, and recognizing that delays (often very significant delays) are simply the current normal.
In one of the most extreme examples of carriers dealing with this unique situation, FedEx Freight actually announced on June 11th to it’s 1,400 customers that it would no longer pick up freight from locations that don’t fit its operational requirements. “The abruptly implemented notice designed to “control capacity and avoid backlogs in the most capacity constrained freight service centers” left shippers with only a weekend to find alternatives.”
What Does This Mean for Your Business?
Plan ahead and build buffers into your schedule: The number one thing your business can do to deal with freight capacity constraints is to plan ahead. Order whatever you need as early as possible so if it gets delayed on a ship or on a truck for an extra week, you’re not panicking. We know and feel your pain - typically, we need whatever it is we are getting delivered to us yesterday. It is easy for us to say “plan ahead” but this is really hard for a small business that is time and cash constrained to do. But, its still good advice and anything you can to plan ahead will help you in so many ways.
Have your Plan Bs ready: Know ahead of time what plan of action you’ll take if materials are delayed getting to you.
Avoid Missed Pickups: Missed freight pickups are painful! Unfortunately, these are becoming more common. One step you can take is to provide an accurate closing time, one that is not earlier or later than when the shipping and receiving department actually shuts down.
Ensure Shipping Information is Accurate When You Ship: Rerouting shipments to new addresses is becoming almost impossible, and when it is possible, it leads to tremendous delays. Check and double check to make sure your information is 100% accurate before scheduling freight.
Consider Insurance: Shipments are not automatically insured and carriers do not
What about your EcoEnclose Freight Order?
If you’ve placed an order with us that will be delivered via motor freight, we’ll work with you to keep all of the above tips in mind as we work through your order, schedule and manage logistics.
We strongly encourage you to build delays into your plan. We are seeing deliveries that were previously three or four days in transit are now six to nine days in transit. We are also seeing 1-3 week delays on shipments (beyond the stated times).
If you need some packaging quickly, we would be happy to ship a small portion via UPS (ground, or if needed, expedited) to help you get what you need quickly while you wait for your broader shipment. Please let us know if you are facing time crunches we can help address by utilizing small parcel carriers.