Ship Smarter: Debunking Common Truck Freight Myths
We’ve worked with thousands of clients and identified common trends preventing companies from making smart truck freight decisions. By equipping you with industry knowledge to make informed and confident shipping decisions, you’ll pay market price for truck freight, identify reliable carriers and mitigate risks of challenging shipments to build a strong truck freight strategy.
Myth 1: One trucking company can do it all
Using one trucking company for all your shipments builds a strong relationship with that supplier and likely ensures volume discounts. But shipping and logistics isn’t like Lord of the Rings. There isn’t one ring to rule them all and there’s no single trucking company that can do everything you need.
Trucking companies are designed to move specific types of freight in certain geographic areas and each has its own niche. For example, Truck Company A might have a strong and established route between Calgary and Houston. They have the most affordable rates and best service if you’re shipping out of those centers. However, if you’re looking to get a truck from Calgary to Alaska, it’s unlikely they’re the right company to do it. The majority of Truck Company A’s customers are moving goods between Calgary and Houston, so they know their capacity will be filled on this lane. They offer the best rates because of the existing volume. If you want to use them to move goods from Calgary to Alaska, they may not be filled to capacity and if they’re moving empty freight, they need to charge a premium or subcontract your shipment to a different company.
If you’re shipping goods to a variety of locations, building a diverse portfolio of trucking companies is a strong logistics strategy. It ensures the best rates for your route, transit times and delivery requirements.
Myth 2: Higher discounts means lower prices
Truck freight companies offer steep discounts for volume; the more you ship, the better deal you get. Typically, truck freight carriers will give a percentage discount on every shipment at a certain volume. This deal is negotiable and if you’re savvy, you can negotiate something quite favorable. This is great if you’re a deal-shopper – someone who loves the thrill of a discounted purchase – but the number on the sale sticker can be deceiving.
Don’t get sucked in by the discount amount. Trucking Company A might offer a steep discount on the shipment from Calgary to Alaska, which looks good. Who doesn’t love 70% off? But wait, there’s a catch. The base rate is significantly higher than any other carrier because this is a lane the company doesn’t have a specialty in. Just because there’s a 70% discount on the base price doesn’t necessarily mean it’s the best option. Trucking Company B only offers a 20% discount, but the base price of the freight is significantly less because Calgary to Alaska is a common lane for them. Ultimately, Trucking Company B is the more affordable and reliable option even though it doesn’t look like a better deal. It’s important to select a carrier based on the actual price of the shipment, not the discounted amount.
Myth 3: Cutting out the middleman saves costs
There’s another truck freight misconception that cutting out the middleman helps reduce costs. Freight forwarders and customs brokers charge a fee to help book shipments and process customs paperwork to allow goods to move across borders. Companies trying to reduce shipping costs might look to do everything themselves so they don’t need to pay a middleman.
The logic makes sense, but in practice, brokers get deeper discounts with truck freight providers because they often have higher volumes. While you pay a cost to use a broker, you’re likely getting a better deal on the truck freight and the added bonus of an expert who can help troubleshoot if any issues arise.
Cutting out the middleman can actually hurt your bottom line, not help it. For example, JORI Logistics has relationships with hundreds of trucking carriers across North America and knows that Trucking Company C is doing regular shipments from Alaska to Calgary. They have empty trucks going back to Alaska and could take your freight at a fraction of the cost of Trucking Company B.
Working with a freight forwarder can accelerate your knowledge of truck freight providers and help you select the right carrier every time. If you have questions, talk to one of our truck freight experts today.