Effective strategies for finding freight capacity

For supply chain, operations, and logistics managers, balancing freight capacity for on-time deliveries and cost control is crucial. But finding the right balance can often feel like solving a constantly shifting puzzle. Our guide offers practical strategies to optimize freight capacity management, including carrier management, leveraging data and technology, and mode optimizations.

What is freight capacity?

Freight capacity refers to the total amount of freight that can be transported within a specific timeframe using trucks, ships, or alternative methods. Grasping this concept is crucial for improving shipping efficiency and reducing expenses. It enables managers to better allocate resources, minimize unused space, and enhance load utilization, leading to cost savings and greater efficiency.

In trucking, freight capacity indicates the space available in a trailer; for maritime transport, it corresponds to the cargo volume; and in air freight, it represents the payload differences among aircraft types such as the 747, 737, 767, or 777 freighters. Logistics managers utilize this information for scheduling shipments, planning routes, selecting carriers, optimizing operations, and lowering costs.

Factors impacting freight capacity

Freight capacity is always evolving and subject to various conditions. Here are several key variables that determine freight capacity availability.

Market dynamics

Market factors greatly influence freight capacity availability. Fluctuations in demand, influenced by economic factors, directly affect the balance between supply and demand, thus impacting freight capacity. 

During economic upswings, increased consumer spending and manufacturing activities can put pressure on freight transportation capacity; conversely, recessions often relieve this pressure by decreasing shipment volumes.

In the transportation sector, factors such as labor shortages affect the availability of freight capacity. For instance, if more drivers choose short-haul routes, there will be a shortage of qualified truck drivers, restricting available capacity. The demand for skilled drivers outstrips supply, resulting in heightened competition among shippers for this limited resource.

Furthermore, fluctuations in the market and variations in demand complicate demand forecasts. Inaccurate data, analytics, and insufficient collaboration lead to unreliable forecasts, making it difficult to gauge freight capacity precisely. This inaccuracy causes inefficiencies and elevates costs for shippers who are trying to secure the necessary capacity.

Seasonal variability

Seasonal changes greatly affect freight capacity. For Example; Holiday shopping, harvest seasons, and industry-specific peaks alter transportation demand. During busy times like this, freight demand soars, straining capacity. While the off-peak periods offer shippers better rates and more capacity.

Carrier capacity constraints

Carrier specific factors affect freight capacity availability. Challenges like equipment availability, truck driver shortage, fleet capacity limits, and operational constraints impact carriers’ ability to meet transportation demand. A shortage of drivers or maintenance delays can restrict truckload capacity, increasing competition among shippers for resources.

Supply chain disruptions

Global events like the Russia-Ukraine conflict, the recent Red Sea crisis, and the COVID-19 pandemic can disrupt logistics, affecting freight capacity availability. Natural disasters, weather issues, strikes, and geopolitical tensions also impact transportation networks, causing delays, constraints, and higher costs. Proactive risk management is vital to handle disruptions.

Regulatory changes

Thanks to new laws and compliance rules, shippers and carriers face ongoing regulatory challenges, which impact freight capacity. Regulations on weight limits, emissions, hours of driver activity, and shipping industry mandates directly affect operational efficiency. Non-compliance not only leads to penalties but also disrupts operations and limits freight capacity.

Shipper strategies for finding freight capacity

Effectively locating available truckload capacity is essential for shippers striving to optimize their shipping operations and meet customer demand. Here are some proven and cost-effective strategies for shippers to navigate the complexities of freight capacity logistics:

Diversify carrier network

Establishing relationships with a diverse network of carriers is fundamental for accessing a wide range of freight capacity options and shipping rates. By cultivating partnerships with both large and small carriers, shippers can tap into a diverse pool of resources, ensuring flexibility and resilience in managing capacity fluctuations. Diversifying the carrier network also mitigates risks associated with reliance on a single provider to deliver it, enhancing supply chain reliability and agility.

Work with Third Party Logistics Providers (3PLs)

3PLs give shippers access to a vast network of resources and solutions to meet all their freight capacity needs. Due to 3PL’s buying power and relationship with multiple carriers and transportation providers, third-party logistics services can assist shippers in finding capacity and moving shipments regardless of season. 

3PLs leverage their expertise and industry connections to optimize freight capacity management, providing tailored solutions to meet specific shipping requirements efficiently. Collaborating with them can also improve supply chain management, optimize inventory, and more.

Prioritize preferred carriers

By partnering with suitable carriers, shippers gain reliable capacity. Implementing preferred carrier programs helps prioritize carriers based on performance, reliability, and service quality. 

Long-term contracts with preferred carriers secure capacity and optimize costs, providing stability for both shippers and carriers. Both parties can agree on volume commitments, rate structures, SLAs, and value-added services, fostering trust and mitigating risks.

Keep transparent communication channels

Open communication with carriers is essential for effective capacity finding. Clear communication about shipment requirements, scheduling, and expectations allows carriers to align their services with shippers’ needs. Establishing regular communication and feedback mechanisms fosters collaboration and trust, improving operational efficiency and service quality.

Plan ahead & monitor market conditions

Proactive planning and monitoring of market trends empower companies to adapt their strategies to changing conditions, optimize their resources, maximize freight capacity utilization, and ensure timely access to freight capacity.  They can leverage insights to anticipate transportation supply and demand, optimize routes, adjust fleet sizes, negotiate contracts, and mitigate risk.

Use flexible pickup or delivery schedules

Shippers can use flexible pickup and delivery schedules to find freight capacity more easily. This involves booking time slots and scheduling shipments in advance. Having flexible schedules allows for better capacity planning and management. It also helps shippers secure better rates from carriers. However, this approach requires careful demand forecasting or a willingness to take risks with scheduling variability.

Businesses can also utilize digital freight brokerage platforms and marketplaces to plan flexible schedules. These platforms connect shippers with available carriers and allow real-time capacity matching, enabling shippers to quickly find suitable transportation options.

Leverage technology

Leveraging technology can help shippers find capacity and connect with carriers seamlessly. For instance, using a digital brokerage or booking platforms and transportation management systems (TMS) can streamline capacity-finding processes and improve visibility into available capacity. 

Uber Freight’s online freight shipping services platform that enables shippers to quote, book, and track shipments from pickup to drop-off.  With access to one of the largest carrier networks, shippers have one-stop-shop access to FTL and LTL capacity across various equipment types.  

Uber Freight’s TMS platform provides shippers with real-time insights into freight movements, carrier availability, and rate negotiations, empowering them to make informed decisions quickly. TMS solutions enhance efficiency and accuracy in managing freight capacity by automating routine tasks, using real-time tracking data, optimizing routing, and consolidating shipment data.

Explore intermodal options

Intermodal transport involves moving freight across several modes of transport like rail, road, air, and sea. Intermodal transportation is highly efficient due to its ability to combine the strengths of different transport modes, such as the cost-effectiveness of rail for long distances and the flexibility of trucks for local deliveries.

Proactively manage freight capacity with Uber Freight

By incorporating these freight capacity strategies, shippers can optimize their freight capacity utilization, improve efficiency, and enhance overall logistics performance.

With one of the world’s largest carrier networks, state-of-the-art technology, and expert logistics consultants, Uber Freight’s dynamic capacity solutions help shippers achieve better service, less risk, and reduced costs. Our suite of logistics technology goes far beyond traditional brokerage offerings, automating procurement and helping you seamlessly quote, book, and track shipments across modes and regions.  Sign up on Uber Freight Shipping to quote and book a load today or connect with an expert to learn more about our customized capacity solutions.