Supply chain leaders continue to focus their efforts on finding the right mix of assets used, market positioning and carrier freight pricing strategies. For carriers, it’s all about balance. Yes, there is the balancing of palletized shipments into full truckload shipments to ensure a truck is loaded properly. However, this is about a different type of freight load balancing-the balancing of assets. Improper consideration of the whole market’s demands and available capacity will lead to upset and delays. As such, carriers need to know a few things about freight load balance scoring and how to assess market conditions to avoid delays, balance their fleets and maximize profitability per load.

Defining freight load balancing

Freight load balancing means capturing the data needed to make proactive decisions regarding where to send trucks, which moves have the strongest profitability opportunities, and when to reject a tender based on that data. It all goes back to the need to recognize what’s happening within the market to ensure a carrier can live up to its contractual obligations, retain drivers and proactively manage asset utilization. 

Carriers need balancing to meet market capacity demands

While this might seem like a relatively simple process during regular economic cycles, it can become a harbinger of future failures during times of disruption. When the freight market meets expectations and is less volatile, it is easy for shippers and carriers to not look at inefficient processes or their transportation procurement strategy. Conversely, when a freight market is in the carriers’ favor, revenue may be increasing, but it’s critical to keep operating costs top of mind while revenue soars. In ignoring the waste, in good times, carriers will most likely see that they will experience increased costs that are not as evident as the top-line revenue is growing. It’s critical that carrier executives are not only focused on the data to reduce operating costs in rockier freight markets but also in great freight markets.

That level of content resides in a vacuum though. When the market shifts, carriers will be on the other side of the equation. As such, they may be less likely to offer the most competitive annual contract freight rates due to shippers’ willingness to stick with spot freight rates in the past. Simultaneously, market dynamics that put carriers in control of rates can seem like a win-win. However, shippers will remember the attitude of carriers in the future. And they may grow to expect a better deal and push hard for extra cost reductions in annual contracts. That’s where the idea of freight load balancing adds the most value. It helps carriers plan the best use of their assets to meet the demands of shippers. And in turn, shippers or freight brokerages can consider their assets, maximizing profitability to build a stronger supply chain that expands throughput.