How to effectively use benchmarked carrier data to improve the bottom line is a key question for many companies. In a recent webinar presented by the Truckload Carriers Association and sponsored by Axele, leading industry experts Dean Croke of DAT Freight & Analytics, Todd Amen of ATBS, and Ryan Camacho of Axele recently held an in-depth discussion on the topic.
Some of the key carrier data and ideas they shared included:
Primary carrier rejection rates
Currently the primary carrier rejection rates range from 25 to 40% in small and medium-sized shippers’ capacity, currently representing around 25 billion in freight spend. These numbers mean that more than a quarter to almost a half of all loads unattended are rejected based on their contractual commitments. The high rate of rejection is the primary contributor to the surging volume into the spot markets. Ideally, for one unit increase in the load, the truck ratio corresponds to 11 cents per mile increase on the way up. On the other hand, a one-unit decrease in the load to truck ratio corresponds to a four cents per mile drop on the way down.
What breakeven point do carriers need?
If you’re running under your own authority, it costs you more money; breakeven jumped the last few years because the liability insurance costs have gone up tremendously. Right now, the breakeven point for carriers running under their own authority is about 50 cents per mile.
Analysts say that the first half of the year, most carriers blow the breakeven. But in the back half of the year, in September through December, there can be a dollar differential. So if you’re running spot market, taking loads from the DAT load board, you could be making $2.50 per mile. Or you can be running for a motor carrier and make $1.50 per mile. If you’re running 100,000 miles per year, that’s a differential of $100,000.
Benchmarked carrier data and big picture open the door to optimization
Carriers of all sizes rely heavily on tribal knowledge. They make decisions based on past experience, without really understanding whether what worked in the past will work again, or if there’s a better way. Making decisions based on tribal knowledge puts carrier profit at risk, because it fails to take into account how the market and industry are changing on a daily basis. Capacity goes down. Spot rates go up. Competition is always nipping at your heels.
The best TMS solutions incorporate advanced optimization technology to crunch the data for you, analyze the options, and present the best ones for you to choose from. Decision optimization using real time data leverages today’s computing power in ways that make tangible impacts to a carrier’s bottom line. It lets you better understand the past, adapt quickly to changes happening today, and plan for the future.
Want to learn more about how to use benchmarked carrier data effectively? Get our free report summarizing this informative webinar.