Intermodal Freight Misperception #1: When Carriers Say “Yes,” the Load is Covered
Brokers managing intermodal freight shipments regularly work with drayage carriers to move containers into and out of rail yards. If a carrier answers “yes” to a load request, the broker assumes that the carrier has reserved the equipment and driver and that the load is covered.
Very often, that’s simply not the case.
Anyone with direct knowledge of carrier operations understands that load requests are often accepted in advance despite the fact that, at the time of booking, the dispatcher has no knowledge of what equipment and drivers will be available when the load needs to be moved.
Here’s an example of what really happens.
A request comes in on Monday to move 10 containers on Thursday at 8 am and the carrier’s dispatcher says “yes.” About 4 pm on Wednesday the dispatcher reviews his next-day loads, compares them to available trucks and drivers, and then builds out a schedule. Ideally, there are no fall-offs, but in this case the dispatcher has overbooked and can’t move 2 of the loads at the agreed time.
The dispatcher may leverage his knowledge of the consignee or shipper to request flexibility. “Oh, I know that company, they’ll accept the load later in the day or tomorrow.” Or, he will simply drop it all in the broker’s lap at the 11th hour claiming driver sickness or an equipment breakdown.
Until that moment, the broker is unaware of any possible problems and assumes the load would be moved as planned.
This scenario plays out daily in the intermodal freight industry and it’s an incredibly inefficient and unproductive way to operate.
Intermodal trucking carriers know, at the time of the load request, if equipment and drivers are available at the designated time. But the simple fact is they don’t like to say “no.” For one, they want to please their customer. More to the point, in today’s somewhat dysfunctional intermodal freight market, they can get away with overbooking.
Another reason they don’t like to say “no” is that it may lead the broker to contact an alternate carrier. If that “2nd call” carrier does a good job, then perhaps the primary carrier loses that customer’s freight going forward.
Problems for IMCs
Whatever the reason, carrier overbooking occurs and creates problems for freight brokers who must scramble to cover these dropped loads. If they can’t, they must make the uncomfortable call to the shipper explaining the situation. Sometimes that involves creative excuses (Hey, we’re being honest here, right?). Brokers will rarely give carrier overbooking as an excuse to shippers about a missed commitment.
On any given day, when you talk to freight brokerage dispatchers about how their day is going, the answer you will often get is “I’m fighting fires.” Many of those fires involve this exact situation – mad scrambling to cover loads after last-minute fall-offs. This rash of phone calls and emails to find alternate carriers can eat up a huge chunk of the broker’s day. Hours and hours of time put against just a handful of bookings. Not very efficient. And not very profitable.
The good news is that solutions do exist to prevent these fires from ever happening in the first place. But newer, technology-based solutions for sourcing dray capacity require a sharp shift in thinking and a willingness to move away from the highly inefficient, manual processes that plague today’s intermodal freight industry.
Intermodal freight marketplaces offer capacity, with complete transparency
Load boards and other freight marketplaces like Uber, Convoy, and most recently Amazon, have for years been establishing a strong foothold in traditional trucking. But to this point such freight marketplaces have not been available in the specialized intermodal drayage niche, which continues to rely on phone calls, emails and faxing as the primary tools for booking, status updates and accessing paperwork.
That’s all changing as companies like DrayNow connect intermodal freight brokers with approved carriers actively looking for freight into and out of rail yards.
For brokers, intermodal freight marketplaces offer several compelling advantages:
Very high acceptance level at the shipper’s/broker’s posted price. Carrier participation in intermodal freight has skyrocketed as drivers shift from long-haul freight to intermodal dray, as Intermodal freight becomes more accessible via marketplaces.. Participation is particularly strong with smaller carriers and owner-operators – historically a segment of the trucking market that has been invisible to freight brokers.
Complete transparency. Brokers see their load postings through every stage of the process – from acceptance to pick-up to delivery. When the load is accepted, the broker can move on to other work with confidence that overbooking won’t result in a last-minute fall-off.
Increased productivity. Marketplaces not only make booking fast and easy, they virtually eliminate the time brokers spend chasing updates and paperwork. Drivers provide updates on shipment progress using a phone-based app. This data downloads to a portal where brokers can get real-time updates. No more calling carriers and waiting for an answer in order to relay status to the shipper.
One of the pushbacks heard from intermodal marketing companies (IMCs) about the use of freight marketplaces is that they don’t get an immediate “yes” or “no” to a load request. You post the load and then have to wait to see if it is accepted. This pushback is pretty ironic since typically carriers say “yes” regardless of their actual ability to handle the move. Acceptance of the load provides immediate feedback, but a very false sense of security.
More advanced intermodal marketplaces can use their technology to make it impossible to overbook. If a carrier accepts a load on the marketplace, any attempt to double book is recognized and disallowed. The carrier would only get data on the load originally accepted.
Freight brokers should embrace the transparency of intermodal freight marketplaces
Marketplaces exist because they efficiently connect supply and demand, whether it’s eBay, Airbnb or a marketplace for dray capacity.
When it comes to managing intermodal dray moves, freight brokers need to realize that existing practices are not sustainable. They are inefficient and inherently flawed because they tolerate deception – promises are routinely made, then ignored.
It’s time for the intermodal freight industry, which has been historically resistant to change, to abandon “business as usual” practices and embrace tech-enabled processes that have already revolutionized other parts of the supply chain.
Freight marketplaces are now available to source dray capacity and brokers need to embrace these new solutions because they bring speed, efficiency and, most of all, 100% transparency to the process of booking and monitoring intermodal freight.