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2014 transport outlook

2014 Opens with a Boom in Transportation – Bright Outlook for 2014

Freight Volumes

The Ontario Trucking Association is reporting what looks to be the start of a banner year in the trucking industry.  With 42% of carriers reporting improved volumes this quarter within Ontario and almost half of carriers reported (48%) that volumes to/from the US increased.

At the same time, TransCore Link Logistics, a leading provider of freight matching services reported opening the year with never before seen highs in load volumes posted on their network.  January was reported to be 47% up year over year.  Link also reported that transborder postings were up 65% year over year for shipments originating in Canada and up 42% for shipments originating in the US.

Pricing

It doesn’t appear pricing has taken on a dramatic upswing despite the growing freight volumes.  However, signs of rising prices are evident with the OTA reporting that 23% of carriers were reporting higher rates in Q1 2014.  This is surprising given that the industry has been in a capacity crunch for years.  One would expect this number to be much higher.  As the market tightens and capacity is further squeezed, it’s likely there will be more upward pressure on pricing in the months to come.

Fuel Cost

Diesel fuel costs are back on the rise.  After a year of declining prices, the on-highway price of diesel fuel has risen back over $4.00/US per gallon.  If rising freight volumes are the sign of a strong economy, the demand for diesel usually goes up and results in higher fuel prices.

Outlook

Based on the economy regaining strength, and excessively positive signs from the trucking industry in Q1 2014, it looks like the industry is in for a busy and profitable year.  High freight volumes will inevitably translate into a capacity crunch, allowing carriers a choice of better paying freight, resulting in on average higher rates and better margins for carriers.

Here at XTL Transport

Here at XTL Transport we’re excited about 2014 and have just been listed in Today’s Trucking as #20 on their Top 100 List of the Largest Carriers in Canada.  We’re bullish about the future and are standing by to help our customers get their goods delivered safely, on-time and in an economical matter.  If you’re experiencing the capacity crunch this year and haven’t tried XTL in the past.  We’re here to help you.

Top 10 Miscommunications Between Shippers and Carriers that Impact Service

Over many years in the transportation industry I’ve come to recognize that the biggest issue to impact service in terms of cost and/or on-time pickup and delivery is miscommunication between the carrier and the shipper.  Here’s my top 10 list of common miscommunications that impact service.

1.      Freight Weight and Size

Accurate freight weight and size is critical for both Truckload and LTL carriers to make sure that the freight both fits on the truck and doesn’t put the trailer over weight, or out of balance.  Planning a load, particularly for LTL is an arduous task.  Inaccuracies in the weight can make an entire shipment plan no longer work.  One miscommunication about freight weight/size could potentially impact several customers.

2.      Wrong Address

Either the wrong address or a change of address can adversely affect a shipment.  Sometimes the mailing address of shipping point is communicated to the carrier when the warehouse could be located blocks away.   The second type of wrong address miscommunication is where a regular shipper moves and neglects to tell the carrier or their suppliers.  Sending the carrier to an old address not only results in extra charges for all involved, but may impact the delivery if the driver runs out of hours driving to the new address.

3.      HAZMAT Freight

The miscommunications that can happen with a HAZMAT shipment could almost be their own top 10 list!  It’s critical to get the right HAZMAT information to the carrier prior to pick up.  The driver must be HAZMAT trained in order to pick up the shipment.  The carrier has to specifically make sure a HAZMAT driver is assigned to the shipment.  If the shipment is LTL, it cannot be mixed with certain other classes of HAZMAT or commodities.  That’s why it’s important to know the class before pick up.

4.      Temperature Requirements

Temperature requirements are another area of great miscommunication.  “heated”, “protect from freeze”, “keep above 10 degrees C” and “must maintain between 10 and 15 degrees C” mean completely different things to a carrier.  Different equipment may be used in each case and it also impacts what other LTL can ship with a particular product.  Make sure you let your temperature controlled carrier know the exact temperature requirements so they can plan your pick up.

5.      Value

In many cases few shippers even consider shipment value when tendering a shipment to a carrier.  However, if your shipment is valued at over $2.00 per pound, a carrier may think twice about wanting to take the shipment.  There is great risk for a carrier transporting high value goods.  If you have high value freight, this should be communicated in advance to a carrier.

6.      Dock Facilities and Pick-up/Delivery

Carriers generally expect to have a dock facility at truck height to load and unload the freight.  If your pick up or delivery doesn’t have a dock, the carrier needs to know.  Your shipment may have to be re-delivered on a flat-bed, or straight truck with a power tailgate.

7.      Loading/Unloading Practises

If your facility practices live load vs. drop trailers, the carrier needs to know in advance.  In many cases it may not be possible to spot an empty trailer on short notice.  Loading time is also another key factor that should be communicated to the carrier in advance.  A long loading/waiting to be loaded time may eat up the hours a driver has left to drive and result in your freight being delayed by a day while the driver is legally off duty.

8.      Transit Time.

Required transit time is an important piece of information for the carrier.  It could impact whether they send a driver at the beginning of his shift vs. end of his shift.  The carrier may have to dispatch a team of drivers to meet the delivery requirement.  In some cases, the required transit time may not even be possible while adhering to the speed limit and hours of service regulations.

9.     Customs Information

Having the customs paperwork filled out correctly, the name of the customs broker, who the clearing customer is for clearance purposes, and the border crossing point is critical to prevent shipment delay for shipments crossing the border.

10.    Appointments vs. First-Come-First-Served

The carrier may not be aware they need to book an appointment, or have the hours to wait in line to get loaded.  Letting the carrier know in advance allows them to plan accordingly.

 

Myth: Carriers Raise Rates to Boost Profits – Busted

iStock_000027163113XSmall-editIn a recent study released by The Conference Board of Canada titled, “We Have Been Here Before” it concludes that since deregulation in 1987 as a whole, the transportation industry has absorbed cost increases while passing most of their productivity gains on to shippers.

Some of the key findings of the study are:

From 1986 to 2003, trucking industry total factor productivity (TFP) increased by an average 1.7 per cent per year. Meanwhile, prices increased by just 0.8 per cent per year on average in nominal terms, while prices dropped in real terms. This adjustment occurred despite average increases in input prices (labour, fuel, capital,etc.) of 2.6 per cent per year.

Put another way, 87 per cent of productivity gains have been used to hold down output prices in the face of rising fuel, capital, labour, and other costs, rather than to increase profit.

This study echoes what most people who work in the transportation industry know to be true.  That trucking is a highly competitive industry where survival depends on productivity gains and price competitiveness.  Generally, any price increases passed along to customers are absolutely necessary and reflective of input cost increases.  And, as the study concludes, most of all productivity gains are used to offset input price increases experienced by the carriers in terms of fuel, labour and insurance cost increases.

Things You Can do to Help Lower Transportation Costs

Many shippers believe that volume buys lower rates.  While this is true to some extent, there is a limit to this logic.  Think about it.  If you drive from point A to point B and add up your time, wear and tear per mile, cost of fuel, etc.  Then do it 100 times and see if your costs go down.  They don’t.  The real challenge to getting costs down is to work with your transportation provider to take cost out of the system.  Here are some areas where you can work with your carrier to help reduce transportation costs:

Waiting Time

Any time spent by the carrier waiting to get loaded or unloaded, is waste.  It’s productive time that is not being used for a productive purpose.  Take steps to reduce waiting time at your facility.  Get trucks in and out fast.  Many shippers have policies of appointment system and/or first come first served systems.  While neither are perfect, the focus has to be on getting the average waiting time for carriers down.  In the end, any unproductive time for the carrier will find its way into your rates.

Fair Assessorial Charges

Many shippers take the approach of trying to eliminate or reduce assessorial charges to unrealistic levels.  Unrealistically low, or non-existent assessorial charges introduce an element of risk for the carrier.  A carrier’s margin is slim and an unexpected cost without compensation can make or break their profitability.  A carrier will have to charge more in their base rate to compensate for the “uncertainty factor”.  Talk with your carriers and negotiate fair and equitable assessorial charges.  This will allow the carrier to price their line-haul economically.

Be a Shipper of Choice

The best, most experienced drivers often have first choice on the loads they want to take.  These most experienced drivers are the low cost drivers.  They know the paperwork, their routes, and how to drive in the most efficient manner.  If these drivers enjoy picking up and delivering at your facility, you’ll be come a shipper of choice.  These drivers will want to frequent your facility.

  • Get them in and out fast
  • Make the waiting area comfortable
  • Provide washroom facilities for the drivers
  • Be courteous and polite to the drivers

Pay on time

Paying on time is critical for a carrier’s cash flow.  Trucking is a cash intensive business.  Many of the costs like labour and fuel are paid up front while the revenue gets paid to the carrier much later.  If you’re using a freight payment company to pay your freight bills, make sure they are paying fairly.  Many freight payment company’s make their money on the interest on your money.  That means that to make money, they have to pay your carriers slower than you pay them.  Many do this through strict payment rules and rejecting invoices that often go back to the shipper and don’t get resolved for months.  These costs will eventually end up in your rates if you don’t take action to make the payment process  easier.

In conclusion, shippers have a great influence on the cost of transportation.  Shipping policies and procedures have a huge influence on the shipping rates you pay.  Your carriers operate on thin margins and competitive marketplace ensures they are squeezing out any savings or productivity gains on their end.  Work with your carriers to generate ideas and policy changes to help reduce or offset cost increases in transportation.

Save the Planet, One Mile at a Time with SmartWay

Did You Know You Could Impact the Environment with Your Choice of Trucking Company?

smartway carrierYes, you can!  Carriers that are part of the SmartWay program have been recognized for their efforts in reducing carbon emissions in their fleets by saving fuel and reducing their impact on green house gas emissions.  Green house gasses are thought to contribute to global warming.

What is the SmartWay Program?

SmartWay is a program by the US Environmental Protection Agency and supported by Natural Resources Canada’s FleetSmart initiative.  It works by helping trucking companies’ catalogue and estimate the carbon footprint of their trucking fleet, then helps them put a plan in place to reduce their emissions.  This is a voluntary program, so SmartWay partners are only those who truly care about their environmental impact.

It is estimated that since the program started in 2004, that over 65 million barrels of oil have been saved.  That’s equivalent to taking 5 million cars of the road for an entire year.

How can You Help?

You can help support the SmartWay program and the environment in two ways.  First, you can join the SmartWay program yourself.  As a shipper, you can measure the carbon impact of your shipping operations and the carriers you choose to move your freight.  You can also help reduce your impact by having no-idling policies at your dock facilities.  The second way you can help the environment is to choose SmartWay carriers more often.  This is the basic premise of the SmartWay program; that shippers, given a choice, will choose to do business with carriers who care about the environment and have taken measures to reduce their carbon impact.

Over 3000 corporations and many fortune 500 companies are already part of the SmartWay program.

XTL is a SmartWay Partner

XTL is a SmartWay Partner.  We’ve been working to reduce our carbon emissions through the SmartWay program.  So, your choice of XTL Transport to deliver your shipments is helping support the goals of the SmartWay program.

If you would like to know more about the SmartWay Program and how XTL can help you, please contact us.

Heated Service Trucking Offered by Canadian Carriers in Winter

Heated Service TruckingWhat is Heated Service Trucking vs. Protect from Freeze Service

Many trucking companies offer both a Heated Service and a Protect from Freeze Service.  Heated Service trucking is where the carrier moves the shipment on a temperature controlled trailer and maintains a specific temperature.  Heated Service may also mean that the carrier is moving the shipment on a regular trailer with a portable heater.  It is important to note the difference between the two.  A temperature controlled trailer can maintain a specific temperature while a portable heater can only add some heat to the trailer.  A trailer with a portable heater has no guarantee of a specific temperature and can under very cold conditions outside, still allow temperature sensitive products to freeze.

Protect from Freeze Service can mean a few different things as well.  A regular trailer with a portable heater could qualify as a “protect from freeze service”.  Many carriers, especially with LTL shipments, particularly in the US, offer a “protect from freeze service”.  The way this service is generally provided is by keeping the freight moving between heated distribution facilities.  While in transit, the freight is not heated, nor on a temperature controlled trailer.  The carriers take the chance that liquids will remain warm enough during transport and that they won’t cool down to freezing temperatures before the freight arrives at the next heated terminal.

Why is it Important to Know the Difference?

If you’re shipping a liquid that is very temperature sensitive in winter time, you will absolutely want a temperature controlled trailer, especially if the liquid being shipped freezes at above 10 degrees Celsius.  If your liquid can be thawed without consequences and it’s not particularly expensive, you might make the choice to go with a “protect from freeze” service vs. a truly heated service.

Canadian Trucking Companies Offer Heated Service in Winter

Canadian trucking companies know how harsh and cold the Canadian winter is.  They are equipped to deal with cold temperatures and have invested in the equipment to protect their customer’s shipments during the cold winter months.

At XTL Transport, the company has gone one step further.  XTL offers a service they call TEMPSOLUTION.  Not only are the trailers temperature controlled, but they are also specially insulated to reduce temperature spikes and influence from the outside of the trailer.  XTL’s TEMPSOLUTION also provides for real-time on-line tracking of temperature of a shipment on the internet.  This is really an excellent solution for shippers who need exact temperature specifications during transit as well as, traceability throughout the supply chain.  This service is ideal for pharmaceutical, chemical and food ingredient shippers.  XTL is a Canadian trucking company that knows how to deal with the cold Canadian winters, while protecting your shipments during the cold winter months!  LEARN MORE ABOUT XTL’S TEMPSOLUTION….

Temperature Controlled Transport Best Practices

temperature controlled transport thermometerWhy do you need to worry about Temperature Controlled Transport?

If you’re shipping food stuffs for human consumption or pharmaceuticals, you have a huge concern for controlling the temperature of your products during transport.  Chemical producers and distributors also are concerned with transporting, sometimes volatile chemicals, at a certain temperature, or protecting them from freezing.  A temperature sensitive shipment could be completely ruined and result in a transportation claim if it is not protected adequately.

In addition, anything for human consumption requires a high level of diligence to protect it from spoilage and ensure it’s safe for the consumer.

What does the Government of Canada have to say about Temperature Controlled Transportation?

For drug products the Government of Canada has published (GUI-0069) that pertains to temperature controlled transport:

  1. Drug products must be transported in a manner that ensures the products will be maintained within an acceptable temperature range as defined in the approved labelling and supported by stability data. Temperature excursions outside of their respective labelled storage conditions, for brief periods, may be acceptable provided stability data and scientific/technical justification exist demonstrating that product quality is not affected.
  2. The transport process and containers should be designed to prevent damage and maintain the integrity and quality of the drug products. For example, transport conditions for ampoules should limit their exposure to physical stress to avoid the development of hairline cracks.
  3. Written procedures for the shipping of drug products should be established. Such procedures should take into account the nature of the drug products, local conditions, modes of transport and any seasonal variations experienced, as well as describe any special handling precautions. These procedures should be qualified to ensure that appropriate conditions are maintained under probable extremes of ambient temperature and should also account for possible unforeseen delays which may occur in shipping/transportation (for example, delays at the border).
  4. Where controlled storage conditions (for example, temperature, relative humidity, light, etc.) are required during transit, the necessary environmental controls must be in place.
  5. Within a transportation container, the packaging configuration, which provides the primary means of environmental control for the drug product, should ensure that the drug product remains within the acceptable temperature range.
  6. Refrigerated vehicles/transportation containers should be mapped and monitored, if they provide the primary means for environmental control. However, this may not be necessary if a qualified insulated container/package, or an appropriate temperature monitoring device on the package or selected packages, or gel packs or similar approved means, or lane profile data are used as the primary means of environmental control.
  7. Temperature and humidity monitoring devices, such as data loggers, should be calibrated at predetermined intervals. Single use monitoring devices should be qualified (for example, verification of performance for indicator strips or freeze indicator units).
  8. Transportation practices by carriers, including any storage and/or transportation activities performed by sub-contractors, should be verified by reviewing documentation. A record of the review should be kept and any discrepancies should have a follow up.
  9. Vehicles and equipment used to distribute, store, or handle drugs should be suitable for their use and appropriately protective of the products to prevent exposure to conditions that could affect their stability and packaging integrity, as well as prevent contamination of any kind.
  10. Loading activities (loading and unloading) should be done in a manner that preserves the quality of the drugs.

These are good practices for all your temperature controlled shipments.  The key is to identify where the risks are and to ensure you have a method to minimize the risks.

Where the risk occurs

Conditions

Solutions

Loading/Pick up Temperature conditions in the trailer before loading are key to ensure the proper temperature during transport. At XTL our TempSolutions trailers are all monitored and tracked in real time on the internet.  It’s easy to verify loading temperature to mitigate risk.
During Transit During transit, many issues can affect the performance of the refrigeration/heating units.  Breakdown, ambient temperature outside the trailer, doors opening and tampering. XTL’s TempSolutions trailers are engineered with high R value insulation to minimize the effect of ambient temperatures outside the trailer.Plus, in the event of a mechanical issue with the refrigeration/heating unit, the insulation protects the shipment for an extended period.You also have the option of real time monitoring and alerts with XTL’s TempSolution which will automatically alert you of any temperature incursions, so you can rest easy that your shipment is maintaining the proper temperature.
During Unloading During unloading, there’s always the risk that the trailer doesn’t arrive at the right temperature.  Arrival temperature is key, along with a quick unloading time to ensure the product is not exposed to ambient temperature. With XTL’s TempSolution you’re able to easily monitor, track and report on arrival temperature.  There will be no debate about how well your product was protected during transit.
After the shipment is complete Many people don’t consider the risks after a shipment is complete.  However, if there is ever a safety concern with your products, you’ll be asked to prove the shipment was protected properly. XTL’s TempSolution is a great way to keep records of your in-transit temperatures.  XTL’s TempSolution records and monitors your temperatures so you don’t have to.  This saves you time.   Plus, you can also pull reports about the temperature details of your shipments at any time.  Saving your time on regulatory requirements for record keeping.

How XTL’s TempSolution will help you with best practice Temperature Controlled Transport

  • Trailers engineered for temperature control with high R value insulation reduces the risk of temperature incursions.
  • Real-time temperature monitoring ensures you have a constant record of temperature to help you meet regulatory requirements and minimize the time you need to spend keeping records.
  • Full reporting suite available on-line so you can pull reports anytime.  This makes your due diligence a snap!  Any quality investigation goes smoothly when you have the data at your finger tips.

For more details on how XTL’s TempSolution can help you improve your temperature controlled transport requirements, visit our website and watch our video.  Or click here to contact us directly.