Freight Tec Blog

Well, it’s official.  Effective January 3, 2012, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) and others implemented a rule banning the use of cell phones while driving for all commercial truck drivers.

Violations can be severe – up to $2,750 fine for each offense and possible commercial license suspension for multiple violations.  It’s not just the drivers either – companies that allow their drivers to use cell phones while driving could be hit with fines up to $11,000.

While this restriction will undoubtedly affect many carriers, Freight Tec strongly supports the FMCSA in this decision with the ultimate objective in keeping our public roads safer.

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The FBI estimates the loss value of Cargo Theft at roughly $30 Billion dollars a year.  Don’t think that effects you as an every-day consumer?  Think again.  That $30 Billion loss causes retail business everywhere to mark-up their products an additional 20% for consumers!  … And that’s on items you buy everyday!  Electronics, food and clothing were the top three commodities stolen in 2010. 
(National Insurance Crime Bureau)

According to the NICB’s report, most Cargo Thefts happen within 200 miles or four (4) hours from the driver’s starting point.  Criminals view Cargo Theft as relatively ‘low risk’ and usually produces a ‘high return’ for them when they turn around and sell the product they’ve stolen.  Criminals follow drivers they’ve targeted and can usually steal the cargo within five (5) minutes after the driver stops.  That is scary!  Another growing trend is ‘Fraudulent Pickups’ where thieves access load information online and impersonate a legitimate carrier to pick up a load directly from the shipper… and after they’ve picked up the load, they disappear.

Ways to Prevent Cargo Theft:

• Run Background Checks and Screen Employees.
• Train Employees and Educate them on hijack awareness and prevention.
• Consider In-Transit Security when choosing shipment routes and avoid stopping again within 200 miles (or four hours) after picking up a load. As well, use secured lots and avoid parking in theft hotspots.
• Conduct periodic supply chain audits to discover gaps in shipment protection.

Let’s work together to keep the cargo we haul safe from criminals and thieves.

Have comments or more ways to prevent Cargo Theft?  Leave us a comment!

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Transportation systems are very dynamic.  During the last few years the railroads have become more competitive with rapid service from Chicago to Los Angeles in order to out-compete trucking companies.  With this kind of service available, the large trucking companies have put more and more of their freight on the railroads double-stack container trains.  Truckers are countering this competition with requests to be able to run heavier trucks on the Nations highways with weights up to 97,000# as opposed to the current 80,000# limits on most roads.  This would drop the cost of transportation per ton for the shipper.

But as the railroads have gained market share, they now face an interesting test:  The peak Christmas shipping season is upon us but so is the need to absorb a huge fall harvest of corn and soybeans that must be moved to market.  Will the railroads be able to handle both peak seasons at the same time with their available capacity of equipment and people?  Time will tell but the railroads claim they will be able to handle the heavy volumes of freight.

Union Pacific Railroad, Burlington Northern Railroad, Norfolk Southern Railroad, and CSX Transportation are all bringing on furloughed people who had been laid off during the recession.  Union Pacific is bringing on 900 locomotives and a vast supply of hopper cars and containers to meet the demand.  The locomotives had previously been in idle storage during the recent recession.  Other railroads are doing much the same including bringing on line much new equipment that they were anticipating they would need.  In addition, railroads are hiring new people and matching them with experienced people and moving them to specific areas around the country to deal with the logistics of moving long trains on a timely basis.  So, hopefully, the Nations railroads are up to the task of meeting the demands of two peak seasons.

Meanwhile, the trucking industry has taken its hits from the Recession and many small carriers are now out of business creating a capacity shortage in some areas.  Adding to their troubles are the new CSA 2010 regulations coming into effect on Nov. 1, 2010 that will target driver safety issues as never before.  CSA 2010 will help to eliminate the unsafe drivers over a few months.  The Winter months are normally slower for trucks and the loss of 3% to 5% of the nations truck drivers may not show up until Spring when freight demand picks up.  But by then, trucking rates will increase due to the capacity shortage that will ensue due to a shortage of qualified drivers.

How does this all affect the shipper?  Generally speaking, from a cost point of view, railroad container freight is less expensive for lanes exceeding 1300 miles between cities where both the pickup and the delivery from the rail terminal is within the Commercial Zone.  Trucks are typically more cost efficient when the mileage between two cities is less than 1300 miles or where multiple stops are required along the route.  Trucks have the advantage of being able to drive directly from the shippers dock to the receivers dock.

Property brokers are finding they must also be more creative to provide the best value to the customer.  Larger Brokers move freight both on trucks and container railroads to meet their customers needs.  The brokerage business is unique in that the largest broker in the U.S. only has 5% of the market share.  According to the U.S.D.O.T., there are over 21,000 property brokers registered with the Federal Motor Carrier Safety Administration.  Brokers continue to grow as they provide the best value for their customers.

Another facet of the transportation industry are the freight forwarders—specifically those that are international in scope.  Several years ago it was predicted that the large multi-national freight forwarders would gain more and more market share.  Even though these large companies have grown, so has the market share.  But the gains in market share have been by smaller freight forwarders who provide incredible service to their shippers.  Why?  Shouldn’t the bigger multi-national forwarder be able to drive costs lower for shippers?  Yes, they do.  But many shippers would rather be Number One with the forwarder they use knowing that that forwarder will do everything possible to get their shipments to their customers on time as opposed to being customer Number 273 with a large multi-national forwarder.  The price is slightly more expensive with the smaller company, but the service is great and the shipper doesn’t need to worry about what would happen if the big multi-national has a conflict with the service needs of multiple shippers and the resulting costs and problems that would create with missed deliveries.

Transportation world-wide continues to be dynamic, competitive, and both service and cost oriented.  Different modes of transportation compete with one another to present a better value proposition to the shipper.  This is good!  Despite the rough economy during the past few years, business is picking up!  Shippers have more options than ever.

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In January of this year, the Commodity Futures Trading Commission proposed a new rule that would set limits on who can trade futures in the oil market.  The CFTC has rightly determined that the sudden increase of oil contract futures in Mid-2008 was caused by speculators who did not have a “legitimate commercial interest” in buying oil contract futures other than to enrich themselves by playing a market.  As a result, oil contract futures shot rapidly upward to $150/barrel.

Under the CFTC rules a Speculator is defined as an individual or group who is trading in a commodity that has no legitimate commercial interest in that commodity who is purchasing that oil contract future as an investment with no real intention of taking possession of the oil.  As an example, those who do have a legitimate commercial interest would be trucking companies, airlines, ship owners, taxicab companies, etc.  A trucking company may choose to buy oil contract futures at a given price to hedge against a future rise in prices.

What happened in the Summer of 2008 was rampant excessive speculation set the price in the oil contract futures market causing irreparable damage to thousands of trucking companies who were forced into insolvency since they could not afford to fill their tanks with fuel as the price rose faster than they could collect on their accounts receivable.  This affected the balance of loads vs. capacity and shipping rates rose dramatically.  Airlines that were on the verge of profitability (for once) suddenly were hit with quickly rising fuel prices that they could not pass back to their passengers who had already prepaid for their tickets.  Everyone suffered—except the Speculators! So the proposed new rule by the CFTC would put position limits on the amount of trading that speculators are allowed to make for a given commodity such as oil.

This is not a new law but only a proposed rule.  Some people are saying that it is about time.  Others are concerned because the comment period for everyone to submit their comments to the CFTC ends on April 26^th and the proposed new rule has limits that would only affect the top ten traders and leave a host of smaller traders untouched as long as they did not speculate beyond certain limits.  When asked by critics why the limits were so high, a spokesman for the CFTC said that the reasoning behind keeping the limits high was the concern that by setting the limits low, most traders would go to the unregulated markets.  This, of course, poses the question:  What will keep the top 10 speculators who the proposed new rule is supposed to keep from over-speculating from doing the same thing in the unregulated markets?

The system is still broke! Oil contract futures are also bought and sold in the international market place.  Although the proposed new rule might help if the top 10 speculators agree not to go to the unregulated markets (ie, the unregulated world markets not controlled by the CFTC), we are still at risk to the same thing happening again and oil suddenly rising to $150 barrel in the future.

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A recent article on Transportation Topics Online posted DOT Sets Texting Ban on Commercial Truck and Bus Drivers.

Distracted driving is a problem for all of us – even if we aren’t the distracted ones on the road.  More and more articles in the news are showing up where distracted driving was the cause of serious, and sometimes fatal, accidents and many innocent people have been hurt.  As we are surrounded more and more with technology, the temptation to use that technology while driving also increases.  Texting is a HUGE distraction and should not be done while driving.

We want the drivers of big rigs and buses and those who share the road with them to be safe.  This [Texting Ban] is an important step and we will be taking more to eliminate the threat of distracted driving.

- Transportation Secretary, Ray LaHood

As a result, the DOT and FMCSA have issued the following -
Drivers sited for texting will be subject to civil or criminal penalties of up to $2,750.

As a Top Freight Broker, Freight Tec encourages and fully supports any regulations made to protect the safety of the public while maintaining integrity and respect for the drivers that move freight across the country.

Be safe out there.

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Stay current with valuable updates – simply by checking your email.

A great way to stay up-to-date on the transportation industry is by subscribing to Freight Tec’s Email Updates.  You’ll automatically get valuable updates from our blog delivered right to your Inbox.

Technology can be a great asset to your business.  Take advantage of this technology today and sit back and let the updates come to you.  You don’t have time to browse the web, you’re running a business – so let the web come to you.

So, how do you sign up?  I’m glad you asked.

In the upper-right corner of this blog, you’ll see an area that looks like this:

Simply follow these instructions:

1. Enter your email in the top box, or click on Get Email Updates.
2. Next, you’ll be asked to confirm your email by typing in a code.
3. Then, check your email.  You should receive an email from us with a final link for you to activate your updates.
4. That’s it! Enjoy!!

You’ll now receive updates whenever we post valuable information on our blog.

If you have any troubles at all, please Contact Freight Tec and we will be happy to help.

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Capacity is rapidly tightening up on ocean containers from China. How will this affect the U.S. domestic market in 2010? How will these containers be utilized in the supply chain?

Fast-paced change buoyed by surge in demand, shortage of containers.

Ocean container spot freight rates on the key export trades out of China to Europe and the U.S. east and west coasts soared by an average of 24 percent in the past three months.

The rate of recovery is much faster than expected, buoyed by a surge in demand this month, according to Alphaliner, the Paris-based container shipping consultant.

Continued high vessel utilization rates on certain trades, especially on services to Europe since Christmas, have also created shortages of empty containers in a number of locations, which in turn, has underpinned the higher freight rates.

The Far East-Europe trade posted the strongest performance with spot freight rates surging by 50 percent since October from $2,500 per 40-foot container to $3,700 based on rates filed with the Shanghai Shipping Exchange.

The steep rise in rates resulted from successive rounds of rate increases imposed by ocean carriers since October and the extension of the peak season surcharge until February.

“It remains to be seen if the rates are sustainable as the Lunar New Year holidays in China in mid-February could lead to some weakening in freight rates,” Alphaliner said.

Spot rates from Shanghai to the U.S. West Coast have risen by 26 percent in the past three months and are 17 percent higher on shipments to the U.S. East Coast.

Asia-Australia and Asia-Africa spot rates also have risen over the past three months, but rates to the Middle East, especially to the Gulf region, remain under pressure.

The high spot market rates on the major trades from China to Europe and the United States have come at a key period as contract rates for 2010 have also strengthened, Alphaliner said.

Twelve-month contract rates for the Far East-Europe trades starting in January or February 2010 are reported to be about 200 percent higher than last year, reflecting renewed optimism about trade prospects.

by Bruce Barnard

The Journal of Commerce Online

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Excellent article taken from Transport Topics, Jan. 04, 2010.

In Pursuit of Accurate Safety Ratings -

CSA 2010, as it is known, is the agency’s revamping of a flawed and oft-criticized safety rating system based on the unreliable SafeStat database.

Freight Tec pays close attention to Safety Ratings and strives to only use safe, qualified carriers in order to protect our shippers as well as public safety.  Our rigorous qualification process has always been somewhat weakened by the often skewed SafeStat and Federal reports.

FMCSA, to its credit, recognized the need to change the way it evaluated motor carriers when it launched CSA 2010.

The data is getting better and more reliable – and thus, it will give us all much more accurate safety reports.  A major difference now will be that a carrier’s ratings will be based on MILES TRAVELED, and not just the size of their fleet.  This is “the real measure of a carrier’s exposure to potential accidents”.

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Freight Tec would like to wish you a very Merry Christmas and a Happy New Year!

- Best Wishes to you and your family, from Freight Tec’s corporate office.

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Excellent article taken from Transport Topics, Aug. 11, 2009.

Opinion: The Customer Service, Dispatch Dilemma -

By Greg Shelton, Dispatch Consultant

As the recession deepens, there is growing awareness in the transportation industry of the role dispatchers play in keeping third-party logistics firms and freight brokerages competitive, particularly in the areas where dispatch and customer service collide.

This article reviews the fierce competition that exists in today’s market.  More and more Brokerages and 3PLs are striving for higher levels of customer service standards to keep customers.  Let’s face it – “keeping customers happy is a matter of corporate life or death”, states Shelton.

Think of it as the evolution of dispatch, in which basic survival depends on a company establishing and observing customer service standards. In a normal economy, hiring more customer service staff might solve the problem, but that’s difficult during a belt-tightening recession. It’s a dilemma that has caused some companies to reach outside the transportation industry and hire customer service and call center managers to help them make do with existing staff.

An experienced manager from another industry could help a company become more efficient by instituting phone upgrades, call accounting and service standards and by creating clear guidelines for various problem-escalation situations. An outside manager also could optimize staffing models by examining call volume spikes and pinpointing scheduling needs by means of forecasts.

But there is a caveat: Bringing in a manager from another industry might sound good to a company in this chaotic environment, but it also might prove to be counterproductive.

Look at this way: Hockey and lacrosse are somewhat similar sports. They both use sticks, have face-offs and use goalies. A hockey coach, while unfamiliar with lacrosse, could use the same techniques to motivate players and evaluate talent on the field, but that is where his effectiveness would end. Shooting a puck off a stick while on skates is radically different than running full speed and launching a ball out of a net.

This is the potential problem with managers from nontransportation backgrounds. Their intentions are good, but relying solely on their previous experience and knowledge will block any chance of success.

Customer service’s focus is on the individual caller and on never giving that caller cause to consider the experience negatively. Call center managers are trained to promote efficiency and work inside statistical models — calls should be answered in so many rings, resolved in so many seconds and agents should answer a predetermined number of calls per shift.

But one cannot assume these methods will translate effectively in a dispatch environment. A dispatcher’s job is to keep freight moving, and as a result there are countless situations encountered on a daily basis that may require excessive time or a firm hand. A manager has to realize that.

There is a real danger in companies becoming so dazzled with call reports and efficiency upgrades that they fail to see the department actually is regressing. Dispatchers become less self-reliant, less diligent and less focused on the overall goal.

Should dispatchers be evaluated using negative feedback, efficiency and call totals? Of course, but letting these philosophies be the only criteria in defining the position will undermine the department’s effectiveness.

My favorite point that Shelton makes is “Can one learn to swim by watching someone or by reading a book?  Perhaps, but without getting wet, you’ll never know what it’s like.”  This means that in order for a company to be successful, those that manager dispatchers need to know exactly what it’s like by doing it.  They won’t learn or understand how to fully motivate, teach, inspire, or otherwise manage a dispatch team if they have no idea what it is really like. 

The Question, as Shelton puts it, is “Which service did your customer pay for?”  Are they paying you for dispatching their loads, or are they paying you for your customer service abilities, which will inevitably become, empty promises.

During this downward trend in the economy, focus on what you do best.  Focus your efforts on your company’s Core Goal.  And strive for that goal in everything you do.  It’s time to simplify processes, re-think programs, and get back to the basics of customer satisfaction.

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