Watch: Why Transportation Rates Are Rising — Even Though Volume Isn’t

Making the right decision on parcel and freight movements is a lot more complex than some shippers realize, says Melanie Burns, senior director of parcel strategy with Transportation Insight.

Shippers are missing a lot when they approach transportation costing solely from the perspective of volume and rates, Burns says. It used to be that freight rates were keyed to volume; these days, carriers are far more strategic about how they approach pricing, taking into account such factors as yield, profit per package and shipment, and the complexity of the shipper’s network. Does all of this align with the carrier’s own network needs, complexities and operational strains?

More costs are creeping into parcel and freight networks these days, often in the form of accessorial charges, which are imposed throughout the year. No longer are rate actions confined to annual general increases or periods of peak demand, Burns says.

For their part, shippers need to understand their own service requirements, packaging choices and methods of executing freight. “Static rules don’t work anymore,” says Burns. “Being able to be dynamic in how you approach each shipment, based off flexible rules, is really going to make an impact on what your cost is.”

Cost calculations shouldn’t be based on single modes, Burns says. Shippers need to see the larger picture, including less-than-trailerload and multi-stop truckload options. In doing so, however, they need to address the challenge of moving data through disparate carrier systems — an essential ability, if they are to make intelligent network decisions.

Burns stresses the need to pull in data from all transportation modes into a single platform that allows them to compare pricing and carrier performance, as well as track shipments from door to door. “That’s going to deliver to you the holistic visibility to be able to make the right decisions as you’re executing,” she says, “and allow you to really be nimble as your business changes.”