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Considering Contract Intermodal Transportation through 2020

Back in January, Brett Eckinger, Director of Sales at Agforce, predicted that intermodal transport would be a good option for many of our clients’ shipping needs in 2020. “We’ll see intermodal getting healthier,” he said. “I think we’ll be able to utilize it a bit more in order to deliver customers’ goods more efficiently.”

And then COVID-19 hit, first internationally and then in the U.S. It disrupted supply chains and wreaked havoc on shipping rates, timelines and efficiency. Though we seem to be past the sudden disruptive shock of the pandemic, it will continue to send waves of uncertainty through the rest of 2020, especially in the logistics market.

Amid this uncertainty, IHS Markit published its quarterly analysis of US intermodal rates, trends and futures, titled US Intermodal Savings Index: An Analysis of the Domestic Intermodal and Truckload Markets.

It, too, acknowledges the market volatility caused by COVID-19, but pointed toward one conclusion in particular: intermodal is a great option right now if you’re looking for consistent pricing on consistent business.

Not only do you get the ”flexibility of over-the-road trucking with the affordability of long-haul rail shipping, all without an investment in tracks,” as Loup Logistics puts it, but you also get the promise of more consistency than we predict in trucking for the rest of the year.

Here’s what the report says happened in Q1: “Once COVID-19 arrived in the US, JOC’s Spot ISI dramatically reversed course. The April reading was 102.9, the weakest month since February 2019 and a stark reversal from 116.5 in March 2020.”

That means that in March, spot intermodal rates were 16.5% cheaper than spot trucking rates, but by April they were just 2.9% cheaper.

Contract intermodal, however, which we are recommending to clients whenever possible, “slipped only one point sequentially to 118.2 in April.” While this is still less of a savings than the historic average (18.2% savings compared to an average 24.5%), it’s still significant compared to truckload.

Contract truckload rates did drop while intermodal rose, but the savings are still notable. While trucking rates went from $1.91 per mile to $1.76 per mile, contract rates rose just one cent, from $1.45 to $1.46.

“Contract markets are typically less volatile during sudden disruptions such as COVID-19,” the report says.

And while it might be tempting to “save money” by choosing spot rates in the short term, for fear of what the future will bring, holding steady and choosing consistency is a better move.

Jim Filter, senior vice president of intermodal for Schneider National agrees, urging shippers to resist turning into transactional customers. “You have three intermodal carriers that represent 70 percent of the market, and [shippers] don’t want to burn a relationship. It’s going to be more harmful long term than any short-term gain,” he said.

Of course, what’s right for you is nuanced, and Agforce understands that. Give us a call at 877.367.2324 or email inquiry@agforcets.com and we’ll put together a personalized recommendation based on your needs and our expertise.

COVID-19 Effects on LTL Transportation

The effects of COVID-19 have been felt across the board in transportation and the changes it brings to customers and shippers is having a widespread impact. There have been some recent and significant changes within the domestic LTL sector, a few we cover below.

Suspending reimbursement payments for failed guaranteed or time critical shipments

Several LTL carriers have suspended reimbursement if a shipment fails to deliver by the due date on guaranteed, time critical or priority type shipments. These carriers will still make every attempt to deliver by the guaranteed date and they will still get priority over non-guaranteed and non-essential goods type shipments. During this time, please be aware this is a carrier by carrier basis, some still honor guaranteed reimbursement failures. This should return to normal after we emerge successful from this virus, however, there is no ETA on when this will occur. Please reach out to your Agforce contact if you have a time-sensitive shipment and would like a solution for how we can get this delivered on the due date.

No-touch proof of delivery receipts

Many LTL carriers have implemented a “no-touch” proof of delivery (POD) or deliver receipt (DR) due to COVID-19. If a driver or receiver is uncomfortable with touching someone’s paperwork or device, LTL carriers are having their drivers sign the POD for the receiver with the receiver’s permission. They then transmit this completed delivery to their dispatchers with the time, date and name of the receiver. With these new implementations, we encourage shippers and receivers to take pictures of the shipment at pickup and delivery to help support a claim if required for damage. Ideally, we would like the receiver to notate with the driver “damage” upon delivery but know that is not always the case as some receivers may not be checking for damage ASAP with the driver onsite with the pandemic.

Undeliverable freight procedures due to business being closed or limited hours due to COVID-19

Our partners are seeing a huge increase in undeliverable freight with receivers being closed or limited hours. This increase is causing multiple issues such as storage, delivery delays, backlogging their supply chains and altering the way their operations can process an increased volume. Prior to this, carriers would call the billing party if a shipment were not able to be delivered and request a disposition. Normally we were given a couple of days to provide a resolution before storage charges were applied and flexibility in working with the customer. Currently, procedures are adjusting to returning the freight back to the shipper automatically with no prior authorization, and a limited timeframe for the customer to resolve the issue or storage charges can occur. In some cases, these charges are automatically applied to the customers’ invoice resulting in large adjustments from the initial quote. Driven largely from nationally based LTL carries, we expect the regional carrier to follow suit. It is highly crucial, now more than ever, for customers to communicate closures or limited hours with carriers to prevent this from occurring.

Delays in invoicing and back office functionality

Back-office functionality has largely been an offshore product for many LTL carriers with the pandemic causing a worldwide shutdown. As they work through the process of it, we have seen a rippled effect of delays in documents and invoices. Communication is paramount, if you need anything from us please let us know, we are doing our best to stay ahead of this.

One positive COVID-19 case can shut down an entire terminal

Increased sanitation measures have been put in place at terminals. If someone tests positive, they will shut down the terminal to sanitize everything. This can cause missed pickups, deliveries, and delays in transit. There is not a great way to predict this, so wherever possible please allow flexibility. We will do our best to communicate any closures that may impact your shipments.

Conclusion

This is an unprecedented time and the need to adapt is paramount. At Agforce, we embrace change and our agility allows us to thrive in any environment. Please reach out to your Agforce partner if you would like to discuss anything around these events or if we can provide more information. We will get through this together and be stronger from it.

“The only constant is change” – Heraclitus

-Ryan Chancey, LTL Carrier Relations Manager

Ryan Chancey

Even better tracking and tracing of your shipments, now at your fingertips.

Our people make the biggest difference in your experience. Whether you’ve been a customer for years or you’re just starting to work with us, you know that. From the second you connect with Agforce, the human element of our business is obvious. We’re there when you need us, to talk you through the logistics of getting your product where it needs to go.

But even our team of rockstars can’t be everywhere at once. That’s why we now offer freight visibility through direct and customer integrations via MacroPoint, FourKites and the Agforce Portal.

MacroPoint is a global, real-time freight visibility platform that provides accurate load location information so you can see all your in-transit freight in real time, at once, in one portal.

FourKites is a Chicago-based technology company that provides real-time tracking and supply chain visibility solutions that simplify the sharing of critical load information for the entire logistics industry.

We understand that you and your customers work to maintain leaner inventory levels, so knowing where your product is and when it will arrive is more important than ever in today’s logistics environment. MacroPoint and FourKites are two of the best platforms to ensuring you have that freight visibility.

But because both of these systems rely on the cell reception of multiple providers, they are fallible. That’s why we make sure our team is always ready to fill in any potential gaps and provide you with a fantastic customer experience, no matter what.

When our partner technology fuses seamlessly with our people, you’re able to stay on top of your shipments end-to-end, watching their progress and tracking them manually when you need to. Through the Agforce Portal, our team has the capability to connect with you via EDI or API with our customers so that all updates will flow through automatically improving efficiency so that you can better service your customers.

We offer tracking via web portal, push notifications and all the other cutting-edge tech you’ve come to expect … with a team of caring, passionate experts to back it up. Can your logistics partner say the same? If not … maybe it’s time to get in touch with Agforce. Call Agforce at 877.367.2324 or email us at inquiry@agforcets.com.

Four Ways “the Amazon Effect” Changed Holiday Shopping and Year-Round Shipping

It wasn’t too long ago that shopping online seemed somehow untrustworthy … like the most likely outcome of an online purchase was a compromised credit card number and eventual delivery of a laughably sub-par product. Then along came Amazon. It went from used book reseller to retail giant with a monopoly over most everything we buy (from food to plants to music and movies, clothing and medicine and art and … yeah, still books) as consumers. This year, eMarketer predicts that almost half of U.S. online sales will go to Amazon (for a total of $282.52 billion, says Chain Store Age).

Somewhere along the way, we not only lost our distrust of buying online, we completely shifted our mindset toward shopping and shipping. As a society, the “Amazon Effect” has changed the way we think about how we buy. And as a 3PL, we need to be aware of just how much it has affected the way people think about freight. 

Here are four ways the Amazon Effect has changed people’s perceptions in ways they might not even be aware of:

  1. People have higher expectations around visibility and ease of booking. It used to be expected that you’d need to make a phone call … wait for a phone call back … coordinate calendars and cost centers … and then shake hands (figuratively). The Amazon Effect has made it so it’s easy to understand options and book services completely independently, all without ever talking to a real person. Now, we think that’s what we all want (is it really though? That’s a question for another day.)
  2. People want to buy in their jobs the way they can in their personal lives. The lines between B2C and B2B purchasing are getting blurrier and blurrier. The advent of two-day and next-day shipping means we’ve become increasingly impatient when the lead time on a product is longer. Due to the size of the product being moved, manufacturing schedules and more, though, it’s just not always possible to deliver B2B goods at the same speed as B2C goods. There’s room for more agility, of course (that’s one of our strong suits at Agforce), but the scale is different.
  3. People want complete transparency in their shipment tracking and tracing. Amazon made it possible to see when your items were scanned onto a truck, which state they’re in, and when they’re dropped on your doorstep (sometimes with photo evidence) all on mobile, all in real-time. This is one area where B2B transportation absolutely can match B2C, and should. It’s reassuring for customers to know where their freight is within the supply chain, and this type of transparency (backed by technology, but not dependent on it) helps keep logistics providers accountable. 
  4. People want an all-in-one shop. Once it became possible to buy your snacks, your movies, your pajamas and your pillows all in one express checkout, people started looking for that same experience everywhere else. It isn’t always possible in industries like agriculture; food and beverage; beer, wine and spirits or plastics and packaging, but it is possible to better integrate your shipments. When you partner with Agforce, for example, we’ll take care of consolidation, intermodal transport, delivery and more … and you’ll have just one point of contact for all of it.

As you do your holiday shopping this year, and as you work with your logistics provider to move your next load of freight, take a minute to consider just how much the Amazon Effect has increased your expectations. At Agforce, we think about it every day … and we’re honestly kind of grateful for it. When your expectations are higher, we learn to work with more agility, more transparency, and more customer service. 

Happy holiday shopping (and shipping!) from your friends at Agforce Transport Services. Looking for a 3PL that delivers the shipping experience you expect year-round? Call Agforce at 877.367.2324 or email us at inquiry@agforcets.com.

Have You Thanked A Truck Driver Today?

We have – It’s National Truck Driver Appreciation Week! The Agforce team appreciates its truck drivers more than we can express every week, but we love having the opportunity to thank them officially and publicly once a year.

This year, we’re visiting some of our local carriers bearing gifts as a thanks for everything they do. We’re also sharing some of the coolest, most mind-blowing facts about truck drivers and the truck driving industry so that all of you can share in our awe of these men and women who quite literally keep America running. 

Truck Driver

Understanding the Importance of Truck Drivers

In 2018, there were 3.5 million men and women employed as truck drivers in the United States, and 7.8 million people employed in jobs related to trucking (hey, that’s us!), not even counting the self-employed. Business Insider did the math and determined that almost six percent of all Americans with full-time jobs did something related to truck driving. And a study by National Public Radio found that “trucker driver” was the most dominant job in 29 U.S. states, including California and Texas. That means even without taking into account all the industries truck drivers support, they are crucial to our nation’s economy on their own. 

Then, consider how much the rest of our economic ecosystem relies on truck drivers: Trucks moved roughly 71.4% of the nation’s freight by weight in 2018, according to the American Trucking Association (ATA), which means without their drivers, virtually every other industry – from agriculture to healthcare to technology to food service to retail – would grind to a halt. Business owners, consumers and those in need of life-saving services would suffer almost immediately. 

As it is, a truck-driving career isn’t without suffering of its own. Drivers put in up to 70 hours behind the wheel every week, and drive almost 300 billion miles a year, combined. These grueling hours can mean weeks at a time away from home, reduced access to healthcare and nutritious foods, lack of physical activity throughout the day and a lot of solitude. It’s not a career that’s a good fit for everyone, making our appreciation for those who love it and do it well even greater. 

Because the domestic trucking industry isn’t affected by automation or offshoring, two of the biggest threats to the American workforce, the need for qualified, reliable truck drivers will only continue to grow. The ATA projects overall freight tonnage to “grow to 20.6 billion tons in 2030, up 25.6% from 2019’s projection of 16.4 billion tons. Truck drivers will continue to make a major contribution to society for decades to come, and we plan to continue thanking them for at least that long. 

Agforce is growing quickly, and we recognize none of that growth would be possible without the network of carriers who allow us to be as agile and responsive as our customers expect. Our truck drivers get us where we’re going – literally and figuratively. 

Want to thank a truck driver today? Use the hashtag #ThankADriver on LinkedIn, Facebook or Twitter. Want to partner with Agforce? Reach out! You can call us at 844.713.6723 or email us at inquiry@agforcets.com.

Case Study: Major Brands

The Client

Major Brands is a leading Missouri distributor of premium spirits, wine, beer, and non-alcoholic beverages, and the largest distributor that remains Missouri-owned and operated.

With offices in St. Louis, Kansas City, Springfield, Columbia and Cape Girardeau, Major Brands employs more than 600 people and serves more than 9,000 retail customers throughout the state.

Opportunity for Improvement

We were moving Major Brands inbound freight through a system of multi-pickup truckloads. Their shipments consisted of a variation of wine, spirits and beer shipping from ports, distilleries and manufacturers across the U.S. But, it wasn’t perfect.   

The multi-pick solution started to create a hassle with missed pickups and late deliveries on Major Brands’ purchase orders. “We had planned ship dates and our sales people worked off of delivery targets. With the fluid market for spirits, slipups started to impact our pricing, bottom line and overall customer experience,” shared Erin Evans, Inventory and Transportation Manager.

They needed to consider different options for their freight in order to operate with more efficiency and dependable timelines.

Solution Design

Our team members Michelle and Chris were on it. The short-term goal was a solution we could implement to solve the inconsistency of Major Brands freight shipping. Long term, we wanted to create a relationship that would provide value to Major Brands.

To do so, Chris, Michelle and the rest of our team worked together to design a tailored plan. We developed a plan with a mixture of LTL and multi-pick loads that focused primarily on the per case cost to the customer. Not only did this provide a lower transportation cost to the customer, it also allowed us to work within the confines and time restraints of Major Brands wide array of vendors. The result is a cost effective, time sensitive and economical approach to moving orders of all sizes.

Today’s Processes

Fast forward to the present and Major Brands doesn’t give their freight a second thought. They put their deliverables in our hands. That’s the part they like best. They just know things are going to happen as planned — the way a true partnership should work.

The new processes have allowed Major Brands to evolve and we have been in lockstep with them the entire way. They now work with less quantity and more brands. It’s all possible because we listened and leaned in. Technology is great, but we gave them so much more: personal attention and the freedom to concentrate on their business.

Today, they generate a purchase order, indicate Agforce for routing and copy us on the email. From there, it is just handled. The vendor reaches out when the freight is ready for pickup and Major Brands doesn’t have to think about it again.

“It is truly amazing. Agforce has removed the burden of our freight shipping unknowns. We can confidently make purchasing projections, a key in the retention of our business, and know things will deliver the way they are supposed to,” stated Erin. “And if there is a hiccup, Michelle and Chris are on it. They are always looking out for our best interests. The partnership is invaluable to us.”

If your freight shipping could use a personal touch, let’s talk. As an extension of your business, your objectives are ours too. Together, we can customize the right plan for you. Give us a call at 877.367.2324 or email us at inquiry@agforcets.com.

Agforce Transport Services Joins U.S. EPA SmartWay® Transport Partnership

Leawood, KS — Agforce Transport Services today announced that it joined the SmartWay® Transport Partnership, an innovative collaboration between U.S. Environmental Protection Agency (EPA) and industry that provides a framework to assess the environmental and energy efficiency of goods movement supply chains.

Agforce Transport Services will contribute to the Partnership’s savings of 215.4 million barrels of oil, $29.7 billion in fuel costs and 103 million tons of air pollutants. This is equivalent to eliminating annual energy use in over 14 million homes. By joining SmartWay Transport Partnership, Agforce Transport Services demonstrates its strong environmental leadership and corporate responsibility.

“As a broker, we are conscious of the carriers we choose to move freight in our network, currently partnering with more than 300 SmartWay carriers. It’s not an easy designation for carriers to achieve, and it speaks to their overall quality and dedication to sustainability. We see this partnership as invaluable to our green efforts and the overall environmental footprint of the freight industry,” said Andy Tuley, Vice President – Business Development.

Developed jointly in early 2003 by EPA and Charter Partners represented by industry stakeholders, environmental groups, American Trucking Associations, and Business for Social Responsibility, this innovative program was launched in 2004. Partners rely upon SmartWay tools and approaches to track and reduce emissions and fuel use from goods movement. The Partnership currently has over 3,000 Partners including shipper, logistics companies, truck, rail, barge, and multimodal carriers.

Agforce offers streamlined and flexible services helping companies dramatically improve their supply chain. We deliver the most effective solution for your business to help you ship your product where it needs to be — when it needs to be there. Together, we can simplify logistics. For more information about Agforce Transport Services, visit agforcets.com or call 844.713.6723.

For information about the SmartWay Transport Partnership visit www.epa.gov/smartway.

What’s Driving the Trucker Shortage?

The U.S. trucking industry is short of drivers—about 50,000 short, according to an October 2017 estimate from the American Trucking Associations (ATA). The developing driver drought is a critical issue that has captured the attention of the trucking world: In an annual survey conducted by the American Transportation Research Institute, driver shortage ranked first among industry concerns.

A number of factors are contributing to the shortage, ranging from economic trends to demographic and regulatory shifts to the rigors of the job:

  • Freight volumes are on the rise, thanks to healthy commerce and a strengthening economy.
  • The average driver age for commercial truck drivers in the U.S. is 55, and 25 percent of current drivers near retirement age.
  • The trucking industry is having trouble attracting younger people to the profession. One issue is that prospective drivers must be 21 years old to hold an interstate commercial driver’s license. That typically means three years after high school, by which point many potential candidates have pursued jobs in other sectors.
  • A range of federal regulations—most recently the Elog mandate put in place in April—require truckers to track the time they work, which can impact productivity, and thus pay.
  • The long hours and requirements of the job can limit its appeal. Most drivers—especially newer ones—are on the road for extended periods of time, returning home only a few times a month. Adapting to life on the road (showering at rest stops, limited dietary choices, safety issues, and more) can make the job less appealing to some.
  • Drivers must pass a DOT (Department of Transportation) physical at least every two years. Some with specific health issues must do this annually. A lot of times the driver must pay for the physical out of their own pocket.
  • Sleep apnea and diabetes can disqualify a driver if certain criteria are not met.
  • Carriers cannot find drivers that can pass the required drug test at hire and then randomly throughout their employment.

The ATA estimates that because of industry growth and retirements, the trucking sector will need to recruit nearly 100,000 new drivers every year to keep up with the demand for drivers. The shortage is particularly acute in the long-haul, over-the-road truckload segment.

There are steps the trucking industry can take to help address the need for drivers:

  • Try to expand the demographic. For example, women currently make up only 6 percent of the truck drivers. Some observers see veterans seeking career transition after military service as another good potential source of prospective truckers.
  • Continue to boost driver wages. The national median for truck driver pay is $53,000, which represents a $7,000 increase from the previous year. For private fleet drivers, the pay increase is up $13,000.
  • Decrease time on the road. Trucking companies can address lifestyle issues of the profession by offering route options that are closer to drivers’ homes, reducing the long-haul lifestyle aspects of the job.

The truck driver shortage affects the entire economy and could have a significant impact on supplier costs and shipping delays. Agforce Transport Services monitors and tracks trucking industry developments like the driver shortage to provide informed consultation to customers.

Agforce specializes in customized transportation solutions for our customers’ specific business requirements. To learn more about how we can help address your company’s needs, contact us today for a free consultation. Give us a call at 844-713-6723 or email us at inquiry@agforcets.com.

Rail Price Spike: What You Need to Know

A capacity crunch in rail shipping is occurring earlier in the year than anticipated has the industry bolstering for substantial and sustained price hikes. Shippers should be aware of this trend. Rail prices are expected to continue to rise over the course of the year.

Market observers are pointing to fully booked rail lines on freight routes out of Southern California as an anomaly that indicates the trend, since the current level of demand typically doesn’t take hold until later in the year. Experts are anticipating unprecedented pricing peaks in rail prices in late summer and into the fall as many factors push more freight to railroads, including overall strong economic growth, a shortage of truck capacity, rising diesel prices, and reduced driver productivity attributed to the electronic logging device (Elog) mandate.

These factors, along with the capacity availability and reliability of intermodal shipping, are shifting the market:

  • Total domestic intermodal traffic expanded 7.4 percent year-over-year in the first quarter of 2018 (the strongest gain since the second quarter of 2014), according to the Intermodal Association of North America, as shippers that could not find truckload capacity turned to the rails.
  • The four-week moving average on U.S. intermodal is up 7.9 percent, according to the Association of American Railroads.
  • The Cass Intermodal Price Index rose 6.6 percent year over year in April to 141.9, close to the all-time record of 143.2 established the month before. The three-month moving average is up 5.9 percent.

With capacity so tight, shippers will need to be more proactive and flexible than ever, and look to lock up capacity as soon as it is available—especially smaller shippers that don’t have predictable volume and weren’t able to lock in capacity contracts earlier on. Those shippers will need to rely on the spot market to find capacity at a time when prices are at record highs.

All of that means shippers are likely to face a difficult year of negotiations and decisions. And in unpredictable markets like the current one, experienced partners and advisors are more important than ever. Agforce Transport Services monitors shipping markets closely and advises our customers how best to navigate the volatility that typically characterizes the market. We can help shippers navigate market fluctuations and better manage rate volatility by leveraging a wide variety of carriers.

Agforce specializes in customized transportation solutions for our customer’s specific business needs. To learn more, contact Agforce today for a free consultation. Give us a call at 844-713-6723 or email us at inquiry@agforcets.com.