On the Front

Category: Freight Management

LTL Rates Increase

May 25, 2017 by Kellie Newman

As 2017 progresses, we continue to see more signs of aggressive price increases within the LTL market. Carriers have invested a significant amount of money implementing new technology to ensure all shipments moving through their terminals are priced accurately which can translate into reweighs and reclassifications for shippers. According to multiple national LTL carrier sources, capacity is tightening rapidly and many are looking to implement “take it or leave it” increases upwards of 20+%. This is a sure sign the economy is changing and price increases are not going away anytime soon. Recently a carrier rep told us their president mandated a 20% increase in revenue per bill and instructed reps to walk away from bad business. Another mentioned they are pushing for a 91% OR (operating ratio) no matter what it takes. Last year, according to YRC CEO James Welch, he said ”Our contractual pricing has continued to increase between 3 and 5 percent. We’re going to continue

Posted in LTL Market Trends, Industry Tips, Industry Trends, Industry Updates, Freight Management, TMS Solution

Increasing LTL Complexity – The Importance of Proper Commodity Descriptions

February 07, 2017 by Kellie Newman

Managing LTL freight has continually become more and more challenging over the past several years. While “surface” pricing appears to be soft, underneath the surface carriers are looking everywhere they can to find additional opportunities for revenue. In many cases it’s understandable – shipments outside the normal, commercial, dock-to-dock moves are more costly to service and should have additional charges. Residential, limited access, and lift-gate deliveries (to name a few) all involve more time, hence more money. Knowing your customer’s specific requirements prior to setting up the load is imperative to receiving an accurate quote. Carriers have traditionally had lengthy rules tariffs which identify and explain these additional charges, but they were often not strictly enforce. However, they have become smarter on their margins and what is impacting their costs, causing a shift in the LTL environment. Not only are carriers now billing for additional

Posted in Industry Tips, Industry Trends, Freight Management, Commodity Descriptions

The Ultimate Solution: Why a TMS is Vital for Your Operations

January 24, 2017 by Kellie Newman

In order to run as efficiently as possible, it's important for manufacturers and suppliers to incorporate a transportation management system (TMS) into their daily supply chain operations. Not only does a TMS provide a significant return on investment (ROI), but it helps shippers cut freight costs and improve optimization across their company. Below we'll dig into the ways a TMS can help your company: Accountability A TMS is imperative for accountability measures within a company. It not only holds employees accountable internally, but also makes sure carriers are performing where they should. We’ll dig into reporting in a later point, but access to performance reports and compliance helps shippers identify trends and weak points for improvement. Having a robust TMS helps managers better understand their supply chain environment and where their employees and carriers should be performing. Actionable Intelligence Ever hear the phrase “you don’t know what you

Posted in General, Freight Management, Logistics, TMS, Transportation Management, Transportation Management System, Recon Logistics, Efficiency, Optimization, Lowering Freight Costs

Watch Your ACC! Understanding and Managing LTL Accessorials

January 10, 2017 by Kellie Newman

Watch your ACC! Understanding and Managing LTL Accessorials As shipping costs rise, it’s more likely small businesses will search for ways to save money within their supply chain operations. In doing so, it’s important to be aware of any potential hidden costs, including accessorials. Over the years, we have observed carriers become stricter with applying accessorial fees to cover inefficiencies when handling shipments outside “the norm.” While manufacturers cannot prevent all accessorial charges, they can take steps to become more proactive. Before learning how to manage accessorial fees, it’s important to understand what they are and why carriers charge for them. Simply put, accessorial fees are added charges to your freight invoice when extra services are required to handle your shipment. Accessorial fees are often added to the invoice after delivery and can be seen as hidden or unexpected fees for manufacturers. Some common accessorial fees include (but

Posted in General, Freight Management, Accessorials, Industry Tips, Industry Trends

New Year, Same Dependable Recon

January 06, 2017 by Kellie Newman

As we begin the New Year, the Recon family would like to wish you and yours a happy, healthy and prosperous 2017. Like many of you, Recon looks forward to another year of business and helping our customers succeed in the New Year. Heading into 2017, we wanted to take a step back and understand our customers’ needs and what they value. Recon is not your typical 3PL or broker; to say we value transparency and a partnership for the long-haul is an understatement. We believe in building and cultivating relationships for the betterment of your business while always remaining open and honest. So exactly how is Recon different? To begin, you can always rely on quick, outstanding customer service with each and every contact. We tailor a solution to your needs; whether it’s lower freight costs, reporting and analyzing, freight bill auditing and payment, consulting services, freight rate negotiations, state-of-the-art TMS accessibility, or a valued partner in the industry

Posted in General, Freight Management, Lowering Freight Costs, Industry Tips, Industry Trends, Recon Logistics, Transportation Management, Logistics

NMFC Rules and Requirements

January 15, 2016 by Recon Logistics

NMFC Rules and Requirements The National Motor Freight Classification (NMFC) is the freight "Bible" for motor carriers and contains rules, packaging requirements, approved freight descriptions, and freight class definitions for all commodities. Freight class of any commodity is determined based on the following: Density Load Ability and Handling Characteristics Value Susceptibility to Damage All carriers strictly require an accurate NMFC description, NMFC Item Number, and

Posted in Freight Management, Lowering Freight Costs, LTL Carrier Inspection, LTL Rating, Re Classification

How to Properly Receive Damaged or Short Shipments

December 11, 2015 by Recon Logistics

Carriers today are very firm regarding adhering to the following requirements before they will consider a claim for approval. Upon arrival of the delivery driver, you must carefully inspect your freight for any sign of potential or obvious damage or shortage. The success of having your claim approved lies in your hands. • Damage: Prior to signing and dating the delivery receipt, clearly note in the presence of the driver that the shipment is damaged -  DO NOT NOTE "SUBJECT TO INSPECTION." Take clear pictures of the damaged item(s), as carriers will require them to be filed with the claim, and be sure to keep the packing material for inspection by the carrier. The more you document, the quicker and more successful your claims resolution will be. • Shortage:

Posted in Freight Management, Industry Tips, LTL Carrier Inspection

NMFTA Rule Change/Reminder

August 14, 2015 by Becky Kelley

Just wanted to pass along one of those "rules" that the LTL carriers are now starting to focus on.  Seems they are getting very technical these days with all of their tariff rules!   In this particular case, the carrier has the right to change the classification based on the overall dimensions of the pallet vs. just using the NMFC for the product.  That may seem unfair, but I always like to look at this from both sides.  The carrier makes money off of selling space from A to B primarily.  Due to the nature of what might ship, weight is a key factor, but it's the overall PCF (pounds per cubic foot) that matters and the carriers are much more diligent now about charging for the space they are providing.  In the example below, the carrier can't maximize their payload with all this wasted space.   So - please be aware of these things and advise your shipping departments to do all they can to "right-size" their shipment. 

Posted in General, Freight Management, LTL Carrier Inspection

Logistics Costs Rise 2.3 Percent in 2013

June 17, 2014 by Recon Logistics

"The highly anticipated 2013 "State of Logistics" report describes last year's logistics environment as uneven. After a slow start to 2013, mid-year shipments were strong before a very deep dive at the end of the year with not much movement in freight rates across the modes." "Trucking capacity is becoming a "more severe" issue for shippers. The truck driver shortage is the "No. 1 concern for trucking executives," who are coping with higher costs for drivers as well as compliance with tougher government regulations regarding hours of service and other driver standards. All this capacity reduction in trucking likely means higher rates for shippers. Wilson said carriers should be able to "significantly" raise truck rates this year, "probably in the 5 to 8 percent range." For the full article click here.

Posted in Logistics, Freight Management, Industry Trends, Industry Updates, Transportation Management

Reweighs and Re-classifications out of Control?

June 09, 2014 by Recon Logistics

Have you noticed an explosion of reweighs and re-classifications with your freight? More and more shippers are voicing concern and it's become epidemic.  More than half of the reweighs we investigate turn out to be carrier errors, and shippers have had enough of this mess. A lot of shippers have an exact process and because of this, they refuse to accept any reweighs. They weigh each skid on a certified, calibrated scale, print the scale ticket and attach it to the corresponding pallet being shipped. They are doing their part to be as accurate as possible. When reweighs happen in these situations, the onus should be put back on the carrier. The shipper should not have to waste their time proving the weight of their shipment. Carriers have been wrong on far too many reweighs recently. Yes, there are shippers out there who have no idea

Posted in General, Reweigh, Industry Trends, Industry Tips, Freight Management, LTL Carrier Inspection, Lowering Freight Costs

The Benefits of Getting a Proper Freight Analysis

December 12, 2013 by Recon Logistics

How often should you have your freight analyzed? Has it ever been analyzed by someone that was looking for every possible opportunity to save you a significant amount of money? If you are like most manufacturing companies, there is a good chance you could save 20-30% on your freight spend. A comprehensive freight analysis should be performed on at least one to two months of carrier invoices (depending on volumes and seasonality) and can generally be completed within a couple days. So how does it work? The data from each freight bill is collected and examined to get a complete and detailed picture of overall cost. In order to uncover savings, everything is analyzed: shipping class, NMFC #s, product descriptions, dimensions, cost/lb, inspection fees, accessorial

Posted in Freight Management, Lowering Freight Costs, Cost Saving Tips, Industry Tips

What Every Shipper Needs to Know

December 12, 2013 by Hank Newman

MAP-21 - Shippers MUST check status of brokers and carriers! 38% of brokers are no longer legal to date! The Moving Ahead for Progress in the 21st Century legislation (MAP-21) contains provisions that have ramped up licensing requirements for brokers of freight.  A broker can be any traditional broker who hires a motor carrier and acts as the intermediary for a shipper, but it also now includes carriers who sub-contract to others.  Many carriers broker out freight and now they must have a broker's license including carrying the new $75,000 bond requirement. THIS IS VERY IMPORTANT!  Shippers must know that any broker they use has the new bond or risk dealing with an entity not legally allowed to broker freight. The FMCSA site is the official site for

Posted in Freight Management, Industry Updates, Industry Tips, General

It is Time to Get Involved!

October 10, 2013 by Hank Newman

Managing freight costs is getting more difficult by the day.  Everyone thinks managing freight costs are important, but they typically just see it as simply cutting carrier costs.  There is so much more to it than that!   Yes, there are shippers who are paying too much and in these cases rate cuts are possible, but the really powerful solutions involve looking at the entire process of freight management.  Let's look upstream - who is managing the process and how? How does our packaging and palletizing of freight impact our rates and costs? What order quantities are most economical?  How about the auditing and freight bill processing systems?  What is our carrier strategy and lineup - is it cheap and poor service, expensive and top-quality, or is it the best combination of each dynamically selected for each shipment?  Do we have a system to track

Posted in Transportation Management, Freight Management, Lowering Freight Costs

How to Reduce Freight Costs - Step 4

February 27, 2013 by Hank Newman

Why is it that freight management often escapes C-level attention?  Isn't cost reduction and enhancing profitability a C-level responsibility?  Step 4 - Distribution of the RFP We've learned the critical importance of understanding your data and your process and have also learned how to construct the components of an RFP that will yield strong results.  Now let's put those components together. A good RFP for LTL carrier procurement should include:  - A comprehensive bid narrative.  Describe the scope of your operations, how orders are communicated, how freight payment will work, your specific locations, carrier performance expectations, and details of your freight characteristics (average shipment size, freight class breakdown, packaging types,

Posted in Freight Management, Lowering Freight Costs, Cost Saving Tips, Transportation Management, Recon Logistics, LTL Rating

How to Reduce Freight Costs - Step 3

February 20, 2013 by Hank Newman

There is a new solution today -  In-Sourced Freight Management - and it's what you need to know to regain control over logistics. It is a team approach, a partnership, a collaboration.  It's based on transparency and direct control over the carrier relationship.  It's no hidden broker or 3PL mark-ups.  It creates maximum value for your company and it's available today with Recon! This series explains what you can do to reduce freight.  It's a roadmap to how brokers and 3PLs find ways to lower rates before they mark them up to you.  So far we've learned the importance of knowing your data (step 1) and knowing your process (step 2).  Now that you have your baseline and know where you are today, it's time to move into step 3 which is the RFP (Request for Proposal) process.

Posted in Cost Saving Tips, Lowering Freight Costs, Freight Management, Transportation Management, LTL Rating

Hidden LTL Rate Increases

February 14, 2013 by Hank Newman

The LTL carriers are driving rates up at an alarming rate lately.  Think this doesn't apply to you since your 85% discount has remained the same over the years?  Think again. The new tactics carriers are using to raise pricing have to do with all the extra charges beyond the discounted base rate.  Over the past year or so, LTL carriers have become increasingly militant at implementing price increases that are very difficult to address and resolve. Here are some of the new ways that LTL carriers are raising your rates without having to actually put in a price increase: Inspections and Re-Weighs.  Carriers now employ workers whose sole job is to weigh and measure everything in order to increase shipment revenue.  They are even compensated for what they find.

Posted in LTL Rating, Cost Saving Tips, Lowering Freight Costs, Freight Management

How to Reduce Freight Costs - Step 2

February 12, 2013 by Hank Newman

Step 1 of How to Reduce Freight Costs discussed the importance of gathering data and developing a deep understanding in order to determine your baseline.  Step 2 will emphasize the process side of the equation so you can put the two together to move on to step 3. Let's jump right into it.   Step 2 - KNOW YOUR PROCESS Now that you know your data - the details of your freight spend, characteristics of your freight, carriers, fuel surcharges, key metrics and so on - you need to know exactly how you are managing the process today. Start with the life of a customer order AND a purchase order.  It is very important to understand how both outbound and inbound orders are managed!  Too often these freight processes are separated and to reduce costs you must

Posted in Freight Management, Lowering Freight Costs, Cost Saving Tips, Transportation Management, LTL Rating

How to Reduce Freight Costs

February 05, 2013 by Hank Newman

Who isn't seeking to reduce freight costs today?  Shipping rates continue to rise and manufacturers continue to search for cost reduction solutions.  LTL freight costs can be especially challenging due to all the variables involved.  Outsourcing to a 3PL or broker is often a first move towards lowering transportation costs, but is it the best move?  Sure, you can save, but are you getting the best possible value and does it fit your organization?   3PL and broker margins average 20% - more for smaller shippers.  Is this a good deal?  Maybe, but if your annual freight spend is around $100,000 or more there just might be a better way.  3PLs and brokers often act as an intermediary blocking complete control over your carriers and rates.  Perhaps they can lower your costs and create efficiency, but what are they making?  Without complete

Posted in General, Recon Logistics, Cost Saving Tips, Lowering Freight Costs, Freight Management

8 Ways to Save Money Through Effective Freight Management

July 12, 2011 by Recon Logistics

There are some very obvious ways to effectively manage freight costs and expenses. The most common is negotiating lower shipping rates with carriers. However, just because your current LTL carrier is showing you a deeply discounted rate off their published prices, doesn’t mean you are paying the lowest price for your shipping. Larry (not really his name) felt he was getting the best prices he could get on his freight management costs. Tough, focused and smart, Larry was proud of the fact that, according to his primary carrier, he was getting an 81% discount. “How,” he asked, “are you going to save me money on my shipping costs?” “Good question,” we responded. “Do you mind if we take a closer look? Maybe there is something

Posted in Freight Management, Cost Saving Tips, Recon Logistics
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