In a volatile market, shippers are looking to pool to maximize budgets

Shoppers have been stripping grocery store shelves of food, paper products and over-the-counter medical items for weeks amid the escalating coronavirus pandemic. This widespread panic-buying behavior has left essential-good providers scrambling to move their freight as fast as possible in order to replenish supplies. 

For some shippers, the rush has meant booking full truckload (FTL) without enough freight to fill the truck. These companies often have too much freight to use less-than-truckload (LTL) services without paying a premium, but they do not have enough to fill an entire trailer. Due to surging demand, holding freight until there is enough to fill an entire truck is not an option, and these shippers end up paying for empty space just as much as they do for freight. 

Flock Freight has designed a pooling service that merges traditional freight models and allows shippers to utilize part of a full-sized trailer at a reduced rate. The rest of the trailer is filled by pallets from other shippers who are moving freight between similar origin and destination cities. 

The concept isn’t new, as partialing freight has been prevalent for years, however, Flock Freight is the first to develop an algorithm that optimizes the outcomes. Consolidators who handle products through regional warehouses or brokerages that manually pair freight on load boards typically manage freight in this medium — all of which operate under no guarantees.

Pooling solves the wasted space problem for shippers who need to move shipments and live in the arbitrage between LTL and FTL. It also eliminates the risks and inefficiencies associated with traditional LTL because freight is loaded and unloaded just one time. 

In short, pooling allows shippers to take advantage of the speed and safety of FTL without throwing away money in the process. 

“We are seeing panic-buying around the pandemic spark significant market volatility,” Flock Freight Senior Vice President of Sales Justin Turner said. “As buying patterns and uncertainty continue to loom, companies are becoming more price sensitive. We provide the marketplace a lower-cost truckload option. Shippers continue to receive access to the transits they enjoy and expect, while typically mitigating the spend.”

While speed is paramount in a crisis, an economic downturn can force shippers to find new ways to capture savings without sacrificing efficiency. The trucking markets are expected to experience cycles of volatility as the world continues to respond to the ongoing public health and financial crises. Companies should position themselves in the most self-preserving manner possible at this time. 

“As non-essential businesses close, we will inherently see truckload spend diminish. It’s safe to assume purchase orders that formerly filled full truckload orders could reduce to lower quantities that fall into the volume LTL range,” Turner said. “If, and when, that occurs, shippers could face cubic capacity and linear feet rules commonly experienced within the traditional hub-and-spoke model. LTL carriers will certainly handle this freight but at a premium, as large volume orders are generally suboptimal for LTL networks.”

Turner challenges companies to consider how much space they are paying for versus how much space they are actually using. If there is a sizable gap between the two, pooling can help close it. 

Turner described Flock Freight as a player in the “gray area” between LTL and FTL that no one truly owns today, helping replenish supplies safely and efficiently by positioning themselves to service grocery, medical supplies and other consumer goods during the pandemic. 

Flock Freight’s pricing model is based on linear feet and pallet count, and Turner said most customers save upwards of 20% compared to traditional FTL prices by pooling. Conversely, when compared to standard LTL services, Flock Freight’s pooling product, FlockDirect, offers 1-3 day faster transits than traditional LTL service with nearly zero damages.