Why is Real-time Trailer Tracking Gaining Traction?

Why is Real-time Trailer Tracking Gaining Traction?

  • LTL carriers are reducing equipment free time and increasing trailer detention fees
  • Many of these carriers now leverage trailer-tracking technology to accelerate equipment returns
  • Carriers and shippers are collaborating to combat the trailer-crunch situation and avoid detention/demurrage charges
December 08, 2021 | Logistics Blogs

Less-Than-Load (LTL) market in the U.S. under pressure?

The rising utilization of drop-trailer programs, compounded by the supply crunch of new trailers in recent times, has carriers and shippers arguing over the extended stay of trailers at warehouses and distribution centers.

Capacity crunch in the supply chain is a never-ending game for logistics service providers. In Q2 2021, the increase in demand for consumer goods was 11.9%, which had a knock-on effect on the supply side due to reduced resources at warehouses and distribution centers.

Resource crunch at the shippers’ end caused longer-than-expected times for loading and unloading goods from trailers, leading them to be utilized beyond available free time.

As a result, tensions between shippers and carriers regarding trailers continue to intensify, leading to sharp surges in detention of containers and demurrage charges in the logistics market.

For instance, TForce Freight, in July 2021, increased its trailer detention fees for large shipper customers from $19 per trailer after five days to $50 per trailer. In addition to increasing accessorial detention charges, carriers are also reducing the duration of free time that shippers are allowed before returning trailers.

Furthermore, reduced capacity due to the unavailability of equipment and trailers increased the flatbed spot rate to a margin of 33.8% in Q2 2021 when compared with the previous year.

How is the LTL market advancing toward real-time trailer tracking?

Trailer-tracking technology has gained traction in truck loading and multimodal transportation, where trailers or containers are away from warehouses or terminals for weeks. The rising costs of trailers, sharp rise in freight demand and capacity crunch have made tracking systems increasingly popular among carriers in the LTL market.

LTL carriers are leveraging trailer intelligence technology to locate trailers, optimize equipment use and reward shippers who return the equipment quickly. Such systems can help freight forwarders find a trailer quickly, reduce labor time, lower disputes with shippers over detention charges and facilitate manual yard checks.

Access to real-time information on trailers’ loaded/unloaded and stationary/moving status enables logistics providers to efficiently utilize limited capacity. In fact, fleets with camera-enabled trailers can now access cargo images that display the activity of shippers and carriers. These images help eliminate any ambiguity about the trailers’ status on the site.

According to a U.S.-based logistics service provider, shippers conventionally conduct manual and batch inspections every day to see their trailers. In many cases, shippers do not have a tracking system to identify or locate their trailers. With the adoption of trailer intelligence, service providers can gather data through the live system to offer more competitive rates to shippers that return equipment more quickly.

Similarly, another national LTL carrier is rolling out a trailer-tracking system in collaboration with vehicle intelligence company Spireon. By gaining greater visibility through trailer tracking, the company plans to save drivers time, optimize loading and yard check processes and reduce equipment costs.

Growing synergy between carriers and shippers can ward off the crisis

Amidst the trailer shortage and technological advances, carriers and shippers are closely collaborating to avoid higher detention fees and loss of available trailer capacity. As a result, shippers and consignees are increasingly becoming attentive toward the situation, with carriers gradually reaching out and jointly operating with shippers to overcome the trailer crisis.

References

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