Chainalytics’ VP of Transportation, Kevin Zweier and MercuryGate’s Phil Melton continue their three-part discussion examining the specific challenges and complexities of flatbed carrier management.
Flatbed is a microcosm of the trucking industry but with greater fragmentation.
When we talk about truckload, we must acknowledge that it’s pretty different from other transport markets like less-than-load (LTL), multimodal rail, or parcel. It’s a highly fragmented market. No one knows how many trucking companies there are out there – they are in the hundreds of thousands. Let’s say you look at the top 100 carriers. From a revenue standpoint, they’re only about $30 billion of a $350-plus billion marketplace. No one carrier, supplier, or vendor can dictate pricing in this kind of market. From an economic standpoint, it’s almost perfect competition. Conversely, no one shipper can dictate pricing in this sort of market either. A large retailer with a billion dollars of transportation spend is still a small portion of the market, so it’s very much driven by classic supply and demand.
The flatbed trucking industry is even more fragmented, overwhelmingly comprised of owner-operators and small trucking firms. There aren’t many large flatbed trucking companies with thousands of trucks rolling down the road attached to flatbed trailers. It’s way more disparate than what you would find in the dry van world. As you might imagine, tapping into that capacity is even more difficult due to the long tail of small trucking companies in the marketplace. It can be hard to find them and hard to manage them.
You can’t build a network of flatbed carriers without a hefty Rolodex.
If you’re under 50, you may not even know what a Rolodex is but, even if you do, you’d still better have a sizable collection of flatbed carrier contact information on the smartphone in your pocket. If you are like most shippers – especially those needing flatbed equipment – you must maintain a considerable number of carrier relationships to ensure they have enough capacity to deliver your products. You’ll also need different types of flatbed carriers – a combination of regional and national providers, short-haul and long-haul, and asset-based providers who own the equipment or brokers who can tap into an even more significant portion of the long tail of supply.
Flatbed equipment presents a whole other challenge when compared to dry van.
Dry van truck trailers are all very much the same. On the flatbed side, the equipment isn’t quite so standardized. Flatbed shippers are often entrusting carriers with loads consisting of big, bulky, oddly-shaped stuff. Things that can’t go into a box, can’t be thrown in the back of a conventional trailer, and require – in many instances – more effort on the driver’s part to get it properly loaded, secured, and often covered, so the product is safe in transit. Those are complicating factors that the shipper has to stipulate and carriers must provide.
Flatbed shippers entrust carriers with loads of big, bulky, oddly-shaped stuff. Things that can’t go into a box and can’t be thrown in the back of a conventional trailer.
And flatbed comes with some difficult to manage load and road variables.
The requirements of a given load determine the equipment you’ll need. Then you have to ascertain the availability of that equipment within your flatbed provider base. Then there are permits and road restrictions that define where the required equipment can go. You’ve seen clearance signs on overpasses and bridges. They’re designed to accommodate ordinary dry van and other standard-sized trailers. But you get some oddly-shaped cargo in flatbed, and determining the route can get complicated. Finding the most direct route involves road restrictions, max clearances, and weight restrictions along the way. The necessity to marry those needs and availabilities quickly is one reason why shippers – especially flatbed shippers – look to a transportation management system (TMS) to catalog, apply, and execute on all those different rules and regulations you need to follow.
In today’s data-dense, connected world, not having TMS means you won’t have the tools to assign the properly-equipped carrier to the correct load. Or to find the most efficient route with the appropriate clearances and weight tolerances. You’ll be unable to quickly ensure that your chosen carrier will be able to haul your freight safely, on the correct route, with the right equipment, and the necessary permits and insurance. Without a TMS, carrier management becomes, well, much more challenging to manage.
Watch this space for part three of Kevin and Phil’s conversation, where they dive deep into the intricacies of flatbed fleet modeling.
Managing your flatbed carriers entails tracking a multitude of details and special load requirements. Reach out to us and find out how Chainalytics can help make carrier management in the flatbed market more manageable. Using one-of-a-kind tools and approaches like digital assets and managed analytics services, we consistently deliver actionable insights and measurable outcomes to our clients.
