Jim Post, VP of Truckload Operations and Development, pairs decades of experience with a seasoned logistics team to tailor time-proven solutions.
Most people are familiar with LTL, or Less Than Truckload, shipping, especially since the change in consumer behavior with COVID, where delivery trucks and small parcels sitting on doorsteps are the norm. But the biggest segment of shipping by far is TL, or Truckload. Understanding LTL and FTL is critical to making the right decision. Any time a company has a quantity of freight that is large enough to fill an entire trailer, usually booking the whole truckload is the smartest way to go. While some big companies have their own fleets, most use national and local carriers to manage their logistics.
Post is the first to admit that the truckload shipping side of the business is challenging for 3PLs.
Truckload done right takes dedication and people-power
“Truckload can be daunting and labor intensive,” says Post. “TL is roughly a $190-200 billion space, versus $38 billion for LTL, but it's more fragmented than LTL. TL's harder to find customers willing to engage on a longitudinal basis because, more than likely, a brokerage has burned them in the past. Our value prop is not based on pure savings but on process improvements paired with excellent outcomes.”
One example of the work-intensive approach taken by Post and his team is when it comes to the due diligence of carriers on behalf of the customers.
“There’s an enormous scam ring in Eastern Europe right now, where people are registering remote carrier numbers with the Department of Transportation and posing as actual brokers or trucking companies. They take freight from the 3PLS, try to resell to other trucking companies, move the load and then don’t pay the underlying trucking company. Theft has also skyrocketed. There’s a large degree of risk in the truckload segment right now,” says Post.
“To protect our customers, we take every carrier we haven't previously worked with through a digital verification system and several human-engineered steps. You say you’re based in Cleveland, but when I ask who your favorite player is on the Browns, you don't know who the Browns are. You're not based in Cleveland. If you work for a trucking company, you know the closest gas station and the local bar. If you don’t, you’re not who you say you are.
“We spend an enormous amount of time on this because the risk isn’t just to us. If I have customers that lose shipments, there’s product loss and financial repercussions, but the downstream effect is severe because I’m injuring somebody’s business relationships – our customers, customer’s customer and so on.
“Rather, if I can perpetually augment good transportation logistics decisions for them, our customers will grow in their niche, and everybody wins. It goes back to taking an inordinate amount of care to ensure that who we’re dealing with is legit and that goods will get picked up and delivered on time and safe."
Why service matters over price
The truckload shipping market has dipped, volumes have dropped back to sanity levels as people spend on services again rather than just goods, and the price to move a truck has fallen back to 2019 levels. We are seeing a race-to-the-bottom pricing strategy that emerges from the large brokerages. Clients are bombarded with their calls, egregious promises, and borderline crazy prices to get business. Brokers don’t mind losing money on an introductory rate because they plan to make it up in subsequent loads.
Post explains how the approach at IL2000 is different.
“We keep prices fair while we continue to focus on the service aspect and the value we provide to their organization across the board. It’s not about the sticker price for that one load. When you call me to pick up a shipment tomorrow because you took the cheap rate and the truck never showed, I’m going to ask why and expect a reasonable answer.
“Price is an important aspect of our value proposition. We want to provide some kind of savings or substantial operational improvement. If margin compression on our end is a result of excellent service, then that's the route we go. For us, it's the long game – if we continue to service a customer every month, they'll return the next.
“This is a two-way business relationship where we devote labor and time to meeting your organization’s needs. If there’s consternation about price or any other issues, let’s have a conversation about it. Chasing the lowest dollar always ends in failure.” – Jim Post
Building the carrier pool
Good, long-established carriers have a pricing floor. Carriers who accept lower rates typically go out of business, and as you approach the floor with pricing, service subsequently goes with it.
“We strive to build a bespoke carrier pool for each customer,” says Post. “Think of us like an old-school matchmaker. No wild swiping left and right. Other brokerages will take whatever is close enough and assume it will work. A lot of times that, coupled with price reductions, results in some really poor service outcomes for the customer.
“We use carriers we have correlations with. We know them well. We've worked with them for years as a team and can solve any challenges that come up together. That translates back to the customer because my ability to make a seamless behind-the-scenes adjustment where services aren’t interrupted is essential. Many customers would be shocked to see how hectic it is behind the scenes.
"TL is a lot harder than it looks, and if you put that in front of somebody without real, long-term experience, regardless of using business intelligence tools, it will end in an absolute disaster. There's real value in understanding the business, your needs, and how to navigate the day-to-day that provides a positive outcome for everybody.
“It’s about building and maintaining carrier relationships. It’s about effectively using our proprietary TMS and supporting products. That gives us visibility into what the carrier’s networks look like and where that matches our customer’s freight.” – Jim Post
Smooth from the get-go
Post explains that hitting optimum doesn’t happen overnight, but smooth operations do.
“It can be tough for customers to understand that there’s going to be a level of continual improvement until we hit that optimum outcome. We have primary carriers, so business is smooth from the get-go, but what's critical is the secondary and tertiary carriers.
What if someone needs to send two loads tomorrow instead of one? We spend the time to find the perfect match, that needle in a haystack of a quarter of a million carriers. Everyone has different needs, different areas they service, and even if they service an area, there’s no guarantee they have a truck on that day.
“One of our clients does private food packaging and ingredients, and a lot of times, they have must arrive by dates to meet production goals. Sometimes the lanes are very niche. There’s no wheat grown in Chicago, so you’re looking to build your network in rural bread-basket states. This doesn't happen overnight. We run a course for all our reps on how to make the calls and continue to build these networks. We expend much effort, time, and labor on starting operations.
“Our commitment when we begin the business is we'll get it up and running smoothly from the start and continue to refine the list until the lanes are with somebody steady and consistent. On-time percentage improves, we hit all the high notes for the customer on service and price, and operations stabilize. You can't complain when we’re 97% on-time and beating the market by five points.” – Jim Post
No, all truckload services are not created equal
Many 3PLs out there offer TL services, but Post explains why IL2000 provides a different class of service.
“At the end of the day, it's all the same equipment. It's a 53-ft swing door dry van or whatever. There's nothing special; none of them have rockets. The key is finding that perfect mix between where human labor stops and technology takes over. At the end of the day, this is a people sport. Unlike many companies in today's over-automated world, our customers don't pine to speak to a real-life person. We answer the phone every time. We actively look for the best shipping services provider, i.e., the best carrier, that can help to get your load, whether dry van, flatbed, or refrigerated, delivered on time. Plus, our ability to look beyond the typical factors comes from looking at the whole issue–considering all possible logistics costs and opportunities for improvement.
“How we’re different in the industry is we think beyond a simple booking. I’m going to strive for efficiencies, like consolidating spend as much as possible to get a core group of carriers where we can commit a load every day. And then Larry's going to show up on Monday morning, and by God, he's going to have a funny joke and drink all my coffee, and then he'll be on his way with his load. That human connection makes the drivers want to be agreeable to the customer's needs instead of whatever the driver feels like doing.
"It's important to understand that I always have eyes on the business, but GPS doesn't tell the whole story. How is the driver doing that day? Does he need to shut down early and get rest? Is he hitting stormy weather? Our customers know a real human is watching their freight and that they won't be notified about a late delivery by a flashing light or a sparse email. We'll call and provide details. Smaller organizations might put an entire month's revenue on a single truck; every load is critical.
“For us, it’s how do I maintain the right human connections at the right spots, so the customer needs are met, and the driver feels like they’re being worked with as opposed to ordered to do something. And in the middle, there's the technology that everybody raves about. It boils down to treating the business like a people sport and leveraging the tech where it matters.” – Jim Post
No bill to foot, tech is inhouse
Though the human touch is paramount to stable and efficiently managed transportation services, tech oils the wheels. The proprietary aspect of the TMS is vital, as it gives IL2000 the ability to build tailored solutions for customer needs.Plus, it enables more visibility and insight into expected delivery times, possible delays, and other facts. This is an absolute must for cost-effective supply chain management, but if you’re trying to go it alone, the options for investing in technology are simply too great.
“If you use a major provider, even a simple EDI connection for one carrier and one customer will cost around $3500. In the case of an EDI, you need a minimum of three different protocols just to make the thing work, plus anything specific to that customer’s needs. Companies are hesitant to spend that money as there’s no guaranteed ROI. And if you still need to transport goods, then you might feel like you have to just hope for the best. We say that there is another option for full truckload shipping, and it’s based on the strength of our tech stack, which we put at your disposal.
“At IL2000, everything is developed in-house. We can build that one little nodule the customer needs for their business. In return, we look at the result with that customer, learn all we can, and then figure out how to apply that to everybody else. Instead of becoming an operating cost, it’s just the cost of doing business.
“At the end of the day, we build relationships with the customers, get to know their needs, and do our best to fulfill their wants, whether with people, technology, or processes. Our expectation is if we can enable growth on the customer side, then we, in turn, grow too. It's a two-way transaction. This is our secret sauce.” – Jim Post
Want to see what this secret sauce tastes like? Me too! Schedule a call with an IL2000 expert to get started.