The lack of transportation capacity is one of the most significant problems in modern supply chains and logistics. Even though the industry seems to develop at high speed, some setbacks like capacity challenge are still causing trouble in massive delivery operations.
Why do capacity challenges arise?
Along with the incredible eCommerce spawn, more and more customers switch to online shopping. Nowadays, nearly 75% of consumers purchase online at least once a month. Such shopping accessibility drives an enormous demand for goods. Growing demand challenges modern logistics and often results in insufficient capacity. While people increase their online shopping frequency, supply chains struggle to find enough trucks for fast and safe delivery.
Besides, the industry experiences a high driver shortage, which harms the capacity state. Although shipping companies may possess many vehicle units, they make no sense without the driver employees. Logistics providers constantly search for a reliable staff skillful in transportation and freight handling.
External factors like market shifts or the spread of pandemics also affect the capacity state. It often happens due to unexpected and urgent requests for particular goods (i.e., medical supplies). In such cases, a large part of the carrying capacity serves urgent delivery needs, leaving many other supply chains uncovered.
How capacity challenge affects shipping prices
Limited carrier capacity inevitably leads to increased shipping prices. Often, vendors book high-priced shipments in fear of failed deliveries and losing customers. All these processes drive the spike in rates for moving services, which would typically cost much less.
Still, having a vast carrier network can prevent you from exceeding the logistics budget. You’ll be able to pick a suitable carrier even in terms of increased rates. Maintaining healthy business communication will allow you to become a client of choice for many shipping providers.
How to deal with capacity challenges?
Sometimes, unprepared vendors can experience noticeable effects of insufficient capacity on their businesses. However, several popular techniques will help you avoid harmful outcomes.
Expand carrier network
Developing the carrier network is one of the main tasks of every business owner. The more carriers are ready to move your shipments, the less you will face capacity challenges. Try to research the shipping services in your area for short-distance deliveries and more significant providers for long distances.
The extended carrier record also allows you to compare their rates more effectively. By getting more shipping practice, you’ll detect which carriers charge more on accessorial fees or freight handling and whether you can cut those costs using a different provider. Thus, you’ll be able to get a more tailored experience and optimize shipping expenses.
Using managed transportation services like GoShip is incredibly effective for expanding the carrier network. Booking your shipments through 3PL providers lets you cooperate with certified carriers and stay away from shipping scams.
Use LTL consolidation programs
Consolidation programs work well for LTL shipments of moderate size. You can cooperate with other shippers to book a joint vehicle unit if your cargo doesn’t require much space in a truck. This method guarantees carrier capacity since multiple shippers don’t have to look for separate trucks. Working by the principles of LTL shipping, the carrier will deliver packages according to their destination.
In addition, LTL consolidation programs are an excellent way to save shipping costs. A consolidated LTL shipment will cost less regarding fuel charges and capacity use.
If you keep the products in a warehouse, consider collaborative distribution. This process combines the orders from multiple shippers storing their goods at the same warehouse or logistics hub. Then, a single truck picks up packages at the storage space and delivers them to the customers.
Become a preferred shipper
In terms of insufficient capacity, carriers sometimes choose whose load to deliver. Mostly, they decide to move for long-term partners or those being stable and flexible. Even if you only shipped with the carrier a few times, you can establish positive and effective communication between the companies.
Maintaining business communication with your carrier network is essential for developing strong partnerships. Ensure to be a reliable customer that’s always clear about their requirements and doesn’t delay the payment. As a result, in a tight capacity situation, the carrier will consider you a preferred partner and prioritize your shipments.
Work with professional shipping providers
The lack of shipping capacity doesn’t mean you have to book whatever carrier, ignoring all your criteria. You still need to think of cargo safety and transit conditions. For that reason, business owners address shipping providers that look up the required capacity.
Reliable shipping platforms cooperate with trusted carriers only, thus minimizing the risks of poor service and financial losses. You can use GoShip to find and book suitable transport capacity in a few clicks.
Besides, we exclusively offer the carrier reliability score, which provides information on the quality of the carrier’s performance. Don’t hesitate to get a free quote right now!