Traci Armstrong
As you may have experienced in your recent shipments or heard about in the news, the U.S. freight and trucking market is in a tight spot at the moment.
But what's going on?
On May 14th of this year, the Supreme Court ruled in Montgomery v. Caribe Transport II and determined that freight brokers can be held accountable under state law for the negligent hiring of unsafe motor carriers. Ultimately, the brokers' shield against personal injury lawsuits has been removed.
So why is this affecting our reputable LTL carriers? First, let's clarify FTL and LTL.
- FTL (Full Truckload): one dedicated truck for a customer's shipment.
- LTL (Less Than Truckload): many shipments for many customers on a single truck.
Freight spillover
Because of the increased risk and costs associated with this ruling, many FTL trucking companies have pulled drivers, shut down, or significantly raised prices for FTL moves to help offset higher insurance requirements and the cost of personnel verification and training. FTL capacity is currently strained and very expensive, so some savvy logisticians have figured out that it can be much cheaper to split cargo across two or three different LTL carriers instead of booking a single FTL shipment. This "freight spillover" is now straining LTL carriers' capacity too and causing delays at terminals all over the country.
What to expect
We do not have a crystal ball, but you can likely expect volatility from all of our LTL carriers over the next several months as this shakes out. Some carriers are not taking any volume shipments (6 or more pallets) to ensure space for other clients, and some are starting to charge a premium for spot shipments or raising prices on customers with tighter margins.
Our advice: we keep solid relationships with our amazing LTL carriers, so most shipments should be fine, but it is good to be prepared. If you can, plan your order an extra day or two early.
Planning ahead? Our ordering details cover lead times and shipping, and our year-end logistics update has tips for receiving freight and handling damage claims.
As always, we're here to chat and help answer any questions.