If you are fortunate enough to be shipping your frozen or temperature maintained product in full truckload quantities you have a fairly wide range of refrigerated (reefer) carriers to negotiate with and award contracts to. On the other hand if you are shipping in less than truckload (LTL) quantities the options and available carriers represent a considerably smaller range of choice. Most refrigerated LTL shipping revolves around one or two freezer locations and local radius shipping in support of the freezer location. You can count on one hand the number of national or long haul carriers providing frozen or temperature maintained LTL services.
Even those "national" players may not match your desired origins and destinations due to limitations in their service area. In addition even the larger scope LTL carriers publish a sometimes restrictive pickup and delivery schedule that might not meet your required delivery or pickup dates. There are hundreds of local, niche LTL reefer carriers serving limited service areas but few if any in that market that come close to the breadth and scope of service and territory that their dry freight LTL trucking brethren can offer.
In addition to the local niche asset based carriers there are even more brokers or non asset based logistics companies that make a market in matching their customers LTL freight with other customers LTL freight to build truckloads with stop offs. They too however are also plagued by limited service areas and restrictive operating schedules. In short the infrastructure is not there to easily move smaller lot shipments anywhere at anytime for reasonable prices. Most of the refrigerated trucking carriers or brokers charge on a per pallet or weight basis for their services.
These factors and others help to explain why a frozen or temp maintained LTL shipment generally moves for multiples of what a similar size and weight of dry freight would cost to deliver. Fuel costs also drive pricing levels in this market as refrigerated tractor trailer units not only burn diesel to power their tractors but also burn diesel to maintain temperatures as low as 0 degrees. The refrigerated units installed on reefer trailers run continuously until the load is offloaded. The driver may turn off his tractor and grab some sleep but the refrigeration unit on the trailer continues to burn diesel to protect the integrity of its load. Not much market demand for wilted flowers or runny ice cream!
At the other end of this situation is the refrigerated truckload market. The truckload market has plenty (in comparison) of local, regional and national players looking for loads. The competition in this market results in some very competitive pricing. So competitive in fact compared to the LTL arena, that it often doesn't take more than several pallets of heavy product to result in a lower cost to place those several pallets on a truckload unit and run it as a truckload. So there go eight pallets weighing 16,000 lbs taking up 16 ft. on a 53 ft. trailer for a cost equal to or less than what the reefer LTL carrier or broker would charge. Most truckload reefer carriers charge for their services on a per mile basis. While loads can max out at 44,000 lbs, the reefer truckload carrier doesn't generally care what the shipment weighs( although the weight is a factor in fuel consumption); they run from point to point for an agreed upon rate per mile without much regard to the weight of the shipment.
If your average consignment is one or two light weight pallets every other week, you're really up against it. Not too many options and steep prices and lengthy transit times to move your product to market. On the other hand if you have multiple shipments daily with pallet weights of more than 1,000 lbs per pallet, and if you also have a mix of one or two pallet consignments and larger lot consignments than you might be able to reduce your time to delivery and reduce your costs greatly by building your own loads.
You could work with brokers who mix and match shipments to build truckloads but in these cases your looking at a 15% to 20% markup at a minimum over direct carriage costs. So if you have the right mix of frozen or temp maintained shipments you could build your own loads.
In addition to the right profile of shipment frequency and density the last piece in the puzzle to be successful in this process is the technology piece. Given the complexities and variations of due dates, shipment size, weight, loading and unloading schedules, appointments, mileage between stops and driver hours of operations regulations you would be hard pressed to build loads that met all of your customers requirements and the realities of space, weight and distance with out such technology.
There are a number of load optimization software programs whose sophisticated algorithms can provide intelligent load planning that builds cost effective, straight line stop off loads that meet required delivery dates at total cost considerably lower than the direct LTL refrigerated shipping options discussed earlier herein.
Available LTL pricing and truckload pricing, stop off charges and other pricing criteria are uploaded to the optimization software to compare direct LTL pricing with truckload with stop off pricing. The setup of the software also configures other variables such as driving time, loading or unloading time, and appointment dates and time to insure realistic load planning. Uploads of shipping level detail from your order entry system are run multiple times per day to update all shipping orders allowing the optimization software to run multiple combinations of the orders to build optimal loads that meet required delivery times and produce savings of 20% or more.
There are a number of Transportation Spend Management (TSM) consulting companies who make a market in temperature controlled and frozen LTL consolidation using these technologies. These TSM companies can run a 30 day sampling of your LTL invoices through the load optimizer to determine the feasibility of load planning for your specific situation. If this is an option for you the TSM companies generally work on a percentage of savings or on a fixed fee.
It's not right for everyone, but with the right mix of shipments it's a great way to improve transit times to your customers, significantly reduce your freight shipping costs and to increase your refrigerated trucking shipping options. That's what they pay us for right?
For a case study illustrating the benefits of frozen refrigerated LTL consolidation services, click here.