Do you still coordinate transportation operations manually? Shippers who operate this way don’t reach the best decisions and usually make costly administrative mistakes, sometimes without even knowing it. Automating transportation management provides numerous opportunities to save money and time while creating better service for customers.
The problem: small shippers can’t afford a transportation management system (TMS), don’t have time to implement one, or assume a TMS won’t help them because their shipment volume is low.
The solution: utilize a Software as a Service (SaaS) TMS. SaaS TMS software is a way to provide TMS technology that can be accessed through any device with internet connection. It brings shippers and carriers together through the same web-based portal.
The most important benefit of SaaS TMS software for small shippers: the fast return on investment (ROI) after implementation.
A SaaS TMS has an ideal cost structure for those who only make a few shipments each month – you pay for what you use. There’s no upfront investment in technology, no paying for expensive upgrades, and no lengthy waiting period for implementation and integration.
Since the technology is accessible in one location to all users, all you have to do is log in and choose the lowest cost or preferred carrier. Due to the speed of implementation, any company will see ROI immediately.
SaaS TMS software produces ROI right away. Part of why this is possible is because the TMS technology makes it so easy to find ROI.
Since carriers and shippers come together through the same platform, all transactions are run through the same system, allowing custom reporting based on historical shipping performance and more accurate estimates of freight costs, class and transit time.
Armed with this information, a shipper can begin optimizing transportation operations. There are 3 areas that are easy to find ROI right after implementation of a SaaS TMS: usage of preferred carriers, mode selection and routing. With the data you want and the ability to choose the best carrier, the best mode and the best route, shipping operations will be at peak performance.
SaaS TMS software is the best transportation management choice for small shippers. It has an ideal cost structure, is easy to implement and will provide ROI quickly.
Do you have experience with TMS implementation? Let us know in the comments below.
PLS Logistics Services (“PLS”), a leading provider of technology enabled transportation management and freight brokerage services, was featured in the Pittsburgh Business Times’ 2015 List of the Largest Pittsburgh-area Private Companies. The annual list highlights privately owned area businesses with annual revenue above $20 million.
In 2014, PLS’ revenue was over $515 million dollars, placing the company 20th on the list of the region’s 100 largest companies. Greg Burns, Chairman, President and CEO of PLS Logistics Services said, “It’s an honor for PLS to be recognized by the Pittsburgh Business Times as one of the region’s largest privately held companies. We anticipate even more growth in the coming year and look forward to continuing our investment in job creation and customer service in this region.”
PLS has over 700 employees and 10 offices worldwide. The company looks forward to adding even more jobs and offices in its next fiscal year.
The Pittsburgh Business Times is a diversified business media company serving Pittsburgh, Pennsylvania and publishes stories daily. It is published by the American City Business Journals and was established in 1981.
PLS Logistics Services is a leading provider of logistics management, brokerage and technology services for shippers across all industries. PLS handles millions of loads annually across all major freight modes: flatbed, van, LTL, rail and barge, air and ocean. The PLS carrier network consists of over 20,000 trucking companies along with Class-1 railroads and major barge companies. To learn more, visit www.plslogistics.com or call (724) 814-5100.
We’ve been keeping track of the various news stories affecting the transportation, supply chain and logistics industries. Here is a quick look at some of the most talked about topics:
Growing Demand for Drones. The Federal Aviation Administration (FAA) is issuing permits for the commercial use of drones while it still develops rules for their use. The agency has approved over 700 permits, but won’t have rules in place until next year.
Trucker Saves County Jailer. Clinton Blackburn won a Carnegie Medal for his efforts to save a jailer who was being assaulted by a prisoner in the backseat of the sheriff’s car. The Carnegie Medal is awarded to men and women who risk their lives while saving or attempting to save the lives of others. Both men sustained minor injuries but recovered fully.
New Container Equipment Cost Low. Low material costs and stable demand have driven the price of new container equipment down to record lows. The container equipment index price took a 10-year low in June, falling below $1,750 per CEU equivalent.
Truck Driver Turnover Rates Fall. The ATA reported the truck driver turnover rate fell to a four-year low in the first quarter among larger fleets and declined 12% at larger and smaller fleets alike. The driver shortage is becoming more significant and trucking companies are getting serious about attracting drivers.
Over-the-road (OTR) freight carriers face pressure from shippers and customers who want impeccable service, and the government who wants advances on environmental performance. In March, President Obama made an executive order that mandates the U.S. government to cut carbon emissions by 40 percent over the next decade, setting an example for industries across the country.
This is just one of a number of crackdowns on carbon emissions the Obama administration has made. EPA Administrator, Gina McCarthy, has even gone as far as to say that cutting carbon emissions is so important that the government can’t wait for ‘green’ technological advancements.
There are plenty of ways to reduce carbon emissions, but many of them include using new fuels, making alterations to trucks or getting new trucks altogether. So, as a carrier, how do you reduce environmental impact without making large capital investments?
6 ways carriers can reduce environmental impact now:
Driver Training: All drivers should complete training aimed at increasing fuel economy, which could save $1,200 in fuel costs and cut eight tons of CO2 annually. This training typically includes progressive shifting, engine speed optimization, idle reduction, smoother braking and acceleration, and anticipatory driving. Some carriers report fuel economy gains of up to 20%.
Low Viscosity Lubricants: Synthetic engine and drive train lubricants can improve fuel economy by 3%, which can save 500 gallons of fuel and cut up to five tons of CO2 emissions annually. Low-viscosity synthetic lubricants can withstand extreme conditions in the engine and can provide additional savings through reduced wear and maintenance of truck systems.
Idle Reduction: An idling truck burns nearly one gallon of fuel per hour. Reducing idle-time could save over $3,000 in fuel costs for each truck, not to mention a reduction in air pollution of 19 metric tons of CO2 annually. This is something the driver must take responsibility for. Some truck stops now have sources of electric and internet for truckers to reduce idle time.
Reduce Highway Speed: Reducing truck speed on the highway can lead to significant fuel savings and eliminate several tons of CO2 emissions. A truck with 90 percent highway miles that reduces its top speed from 70 to 65 miles per hour could cut its annual fuel bill nearly $1,500 while eliminating almost 10 tons of CO2. This can be done through speed limiters or through driver training. Slower highway travel also reduces engine and brake wear, which cuts down the cost and frequency of maintenance service and keeps trucks on the road longer.
Intermodal: Over long distances, using intermodal transport can cut fuel use and carbon dioxide emissions by up to 65%, compared to truck-only moves. Carriers benefit from using trains to take cargo long-distances, especially if that cargo is not time-sensitive, by taking more frequent loads shorter distances; sometimes a truck could take a shipment to an intermodal yard several times in the amount of time it would take to haul that freight across the country.
Improved Freight Logistics: Proper logistics can reduce things like empty return trip miles. Eliminating just 15% of a truck’s empty miles could save $3,000 in fuel and reduce 24 tons of CO2 annually. Improved freight logistics also includes proper load matching, more efficient route and mode selection and better loading/unloading practices.
There’s a lot of pressure on carriers to keep up service levels while reducing environmental impact. By following these 6 practices, you can improve environmental performance without disrupting service or buying new vehicles.
As a carrier, how do you lower emissions? Let us know in the comments below.
Less than truckload shipments typically weigh between 151 and 20,000 pounds. When a freight shipment isn’t large enough to fit into a 48- or 53-foot trailer, a shipper’s best option is to use LTL. This transportation option is more cost-effective and environmentally friendly when only some products need transported.
The benefits of LTL shipping include gaining control over shipment visibility, decreasing costs, and obtaining scheduling flexibility.
State of the LTL Industry
LTL trucking has suffered for a long time. Historically, it has been an expensive mode of transportation. However, the past couple of years it has seen unusual growth. Limited capacity in the full truckload sector has forced some freight to be shipped via LTL. Some LTL carriers are benefiting from this, but many aren’t.
Most of the time, your LTL freight will be carried by a billion-dollar LTL trucking company. The industry is dominated by these large carriers, and this trend is likely to continue. The top 25 LTL carriers own approximately 91% of all LTL revenue and are benefiting significantly from the rise in economic activity, increasing revenue 9.1 percent in 2014. This is all at the expense of small LTL carriers, whose revenue dropped 6.6 percent in 2014, which followed a 3.2 percent drop in 2013, and many are going out of business. But for large LTL carriers, the future looks bright. They will continue to grow and eat up more of the LTL market.
As economic activity continues to rise, there will be more pressure on freight capacity and pricing in the LTL trucking sector. 3PL-shipper relationships are valuable and common because 3PLs know how to negotiate with the large LTL carriers and secure better rates and better service than a shipper.
Determining LTL Pricing
LTL rates can be very confusing because a variety of factors calculate the final payment. For truckload shipping, rates are determined based on per-mile or per-hundred weight plus a fuel surcharge, but LTL shipping is influenced by weight, density, class, distance and more. Less than truckload shipping is used for shipments that are too large to be sent as parcel but too small to fill an entire truckload. LTL carriers collect freight from various shippers and consolidate that freight to its destination.
Here are 8 factors that determine LTL freight rates:
Weight: For LTL shipments, the more a shipment weighs, the less you pay per hundred pounds.
Density: Shippers have to know how to accurately calculate the LTL shipment’s density and mark it on the BOL. The total weight of the shipment is divided by the total cubic feet to determine density. If the shipment is palletized, use the dimensions of the pallet, the combined height of the freight and the pallet, and the total weight of the shipment. Once density is calculated, you can determine the freight’s class.
Freight Class: There are 18 different classes – ranging from 50 to 500. The class is determined by density, value, stow-ability and handling. Lower classes have lower rates and higher classes are subject to higher rates.
Distance: If a LTL shipment has to be interlined, then there could be more charges. Interlining occurs when a shipment’s destination is outside the carrier’s standard service area and the carrier must find another LTL carrier to finish delivery.
Base Rates: LTL carriers establish their own base rates, which are quoted per one hundred pounds.
Freight All Kinds (FAK): FAK is an arrangement between the client and carrier that enables multiple products with different classes to be shipped and billed as the same freight class.
Minimums: LTL carriers apply a specific price point, an absolute minimum charge, which they will not charge below.
Accessorials: These charges are incurred if LTL carriers preform more duties than stated on the BOL. Usually these charges can be negotiated or avoided.
Characteristics that Determine LTL Freight Class (and Why Class Matters in LTL Freight)
Freight class for LTL shipments is important because it plays a substantial role in calculating how much the LTL carrier will charge for moving the freight to its final destination. There are 18 different LTL freight classes: 50, 55, 65, 70, 77.5, 85, 92.5, 100, 110, 125, 150, 175, 200, 250, 300, 400 and 500. The higher the class, the higher the rate for every hundred pounds you ship. If a product’s classification is miscalculated, then the shipper runs the risk of paying too much, violating transportation laws which, if caught, could lead to major fines.
Before the freight class can be determined, there are 4 characteristics that must be identified:
Density and Value: The density is the space the item occupies in relation to its weight. The density is calculated by dividing the weight of the item in pounds by its volume in cubic feet. Density guidelines assign classification 50 to freight that weighs 50 pounds per cubic foot. The Commodity Classification Standards Board (CCSB) assigns classifications 70, 92.5, 175 and 400 to freight with densities of 15, 10.5, 5, and 1 pound per cubic foot, respectively. Freight less dense than 1 pound per cubic foot is classified as 500. Your item’s volume in cubic feet is Length x Width x Height/1,728, where all dimensions are measured in inches. The density of your item equals Weight/Volume, where Weight is measured in pounds and Volume is measured in cubic feet.
Stow-ability: Most freight stows well in trucks, trains and boats, but some cargo is regulated by the government or carrier policies. Some cargo cannot be loaded with other cargo. Hazardous materials are transported with specific instruction. Excessive weight, length or protrusions can make freight impossible to load with other freight. The absence of load-bearing surfaces makes freight impossible to stack. A quantifiable stow-ability classification represents the difficulty in loading and carrying these items.
Handling: Most freight is loaded with mechanical equipment and poses no handling difficulties, but some freight, due to weight, shape, fragility or hazardous properties, requires special handling. A classification that represents ease or difficulty of loading and carrying the freight is assigned to the items.
Liability: Liability is probability of freight theft or damage, or damage to adjacent freight. Perishable cargo or cargo prone to spontaneous combustion or explosion is classified based on liability and assigned a value per pound, which is a fraction of the carrier’s liability. When classification is based on liability, density must also be considered.
How to Drive Down LTL Costs
There are two notable ways to drive down LTL freight costs. The first is to avoid or mitigate accessorial charges. These occur when a carrier has to provide services above and beyond what is ordinarily required for standard shipping procedures. There are three different types of accessorials:
Organizational: These are charges when a carrier has to make an unnecessary appointment call, reweigh an LTL shipment or correct the bill of lading (BOL).
Transportation: A carrier will charge extra for transportation when a driver has to go inside a building to deliver a package, is going to an area that is difficult to get to, or if the freight doesn’t fit neatly onto a pallet or into a truck.
Equipment: These charges are most common. The fuel surcharge belongs to this category. A carrier will make additional charges if a lift gate, forklift or other equipment is needed for delivery.
There are many different accessorial charges a carrier may use and sometimes it is impossible to avoid them. However, you can avoid or mitigate most accessorials by being aware of what charges may apply to your individual LTL shipments.
The second, to work with a 3PL. They are very knowledgeable in the LTL industry and can help you avoid accessorial charges. A 3PL is also experienced in negotiating with LTL carriers, so they can get you the best rate with the best service. 3PLs can also provide a number of other services to give you visibility and control over your LTL shipments.
Why LTL Carriers Add GRIs
A general rate increase (GRI) is the average amount that LTL carriers increase base rates. Carriers apply a GRI to all or specific trade routes in order to balance the cost of business. The rate increase helps carriers maintain service levels, attract and retain drivers, compensate high fuel costs and integrate technology to enhance customer service.
For shippers, GRIs generally mean that you will pay more to move your LTL freight. To avoid a GRI surcharge, you can negotiate special rates with carriers or leverage a 3PLs buying power to secure competitive pricing. A 3PL helps companies recognize when a GRI is affecting their bottom line, and can advise shippers on how to keep costs down.
LTL Shippers: How to Improve Attractiveness
To secure capacity from LTL carriers, shippers need to consistently differentiate themselves and improve their attractiveness to carriers. Today, carriers expect more from shippers in exchange for competitive rates, including:
Annual freight spend and shipment data. Shipment level data should include ship dates, origin and destination zip codes, freight class, weight, details of accessorial charges, number of pallets, their dimensions, and shipment density. With more information at the carrier’s disposal, there is less risk.
Pictures. Provide LTL carriers with photos of common inbound and outbound shipments from your dock, as well as corresponding weight and dimensions of LTL shipments in those photos.
Transparency. Disclose your historical frequency of guaranteed service, volume shipments and frequency of claims. Hiding information from a carrier because you fear higher rates may ultimately lead the carrier to increase GRI or undergo major supply chain disruptions.
Know the trends. Ask carriers to bid using current tariff rate bases and use a standardized market fuel surcharge program.
Enlist a 3PL. Shippers will benefit from a 3PL’s pre-qualified LTL carrier network, technology, analytical tools, relationships and support without the fixed expense of managing and tracking LTL freight in-house.
How 3PLs Benefit LTL Shippers and Carriers
Moving LTL freight isn’t easy and often shippers need assistance, but where does a carrier go for assistance? Many people are unaware that 3PLs are there to help both shippers and carriers. Although a 3PL may negotiate a low price from a carrier, they will help that carrier in other ways, otherwise the carrier would never agree to lower prices.
To help demonstrate this point, here are four ways that 3PLs help carriers and shippers:
Pricing: When a 3PL manages pricing, LTL shippers can go to one place to look for capacity instead of calling multiple carriers, repeatedly providing pickup zip, destination zip, piece count, and weight. Carriers working with 3PLs can get the targeted freight they want at a reasonable price and protect margins.
Administrative Tasks: Inevitably, everyone has to do paperwork. A 3PL will facilitate document creation with a shipper and transfer them to the correct LTL carrier. The shipper will save time doing the paperwork and the carrier will save time waiting for it; both can focus more time on core business functions.
Technology: TMS technology from 3PLs simplifies the shipping process for both carriers and shippers. LTL shippers will automatically get the best rate, lane and mode while LTL carriers will be connected with their ideal customer base.
Special Shipping Arrangements: These can be time consuming and difficult, especially for LTL shippers. A 3PL will have pre-qualified carriers for any special shipping requirements, and may even be able to help mitigate LTL accessorial charges. This saves the shipper time from searching around for the perfect carrier. LTL carriers benefit, too, as they can spend less time and resources on advertising/promoting their special shipping capabilities.
Palletizing may seem like a simple task of stacking boxes in the right order, yet doing this without the proper skills and knowledge may cause freight damage. Improper palletizing can lead to 50% of boxes’ compression strength loss.
We’ve created a useful palletizing guide to help you with shipment consolidation.
Use a Slip Sheet.This is a plastic sheet, used to protect cargo on the bottom of the pallet. On wooden pallets, spaces between decks can be up to 4 inches, which results in no support of the boxes’ bottom. To avoid compression strength deprivation, use slip sheets to cover the bottom of the pallet.
Put Boxes in Stable Position. It’s a simple physics law: create a stable base layer by placing the heaviest boxes on the bottom of the pallet. The top layer should be full for steadiness, but if there are not enough boxes to fully stack a pallet, place the last few along the outside edge.
Stack in Columns. For greater stability, boxes should be stacked in columns with one box directly over the other. To reduce the danger of damage, stick items as close to each other as possible. Column stacks prove to be the best way to make pallets stable and safe for shipment.
Strap for Extra Safety. Use metal strapping or plastic wrap to secure individual pieces over 150 pounds to the pallet. Keep banding and straps close to the load to minimize damage.
Use Stretch Wrap. Putting boxes into columns can make the load sensitive to shifting. The best solution to this problem is to use stretch wrap. It can be applied manually or with the help from a wrap machine.
Help from Labels. For correct palletizing, print a visual reminder of proper pallet patterns and place it on the container or provide it to the staff. Also, don’t forget to label all shipment pallets with an address and phone number.
Stack in Pyramid.Pyramid-shaped loads may appear to be stable, but it is a less secure and less steady form of palletizing. The top boxes in a pyramid have a high risk of damage. Don’t build pyramids.
Neglect Wide Gaps. Some wooden pallets have wide gaps between boards, around 4 inches. When you bridge this gap with a box, you create an overhang situation which reduces a box’s compression resistance potential.
Interlock Boxes. Interlocking can reduce strength by 50% and lead to freight damage. Since 2/3 of potential compression strength is in vertical edges and corners, it is important to stack boxes edge-to-edge and corner-to-corner.
Create Overhang. Overhang happens when boxes are hanging over the edge of the pallet. When this happens, two edges of the box that are not hanging get all the work for load support. Overhanging exposes freight to damage and decreases a pallet’s strength. Pallet overhang can reduce top to bottom compression up to 30%.
Less than truckload (LTL) shipping doesn’t have to be complicated or expensive. In order to drive savings to your LTL transportation spend, it’s important to understand the factors that determine LTL pricing, including, minimum rates, freight classifications and accessorial fees. And, many carriers are increasing their LTL shipping rates because of fuel prices and tight capacity. Learn how you can avoid additional fees and ship your LTL freight effectively.
The drayage business is facing a crisis in ports from California to New Jersey. Congestion at coastal ports is adding millions to shipping costs while reducing productivity of drayage companies and threatening commerce’s explosion. Severe winter weather and spring floods slowed truck turn times at intermodal terminals as well. According to Tioga Group, drayage delays have added $348 million in supply chain costs and 15 million hours of work, lost.
Shippers are affected with slower delivery, higher costs and unpredictable delays when transportation disruptions occur. Here is essential information on typical drayage problems and possible solutions.
What draws a truck’s turn time out? Drayage means carrying containerized cargo by truck from port terminal to shipping docks, warehouses or rail ramps. The time required to complete a trip between port and warehouse, is called turn time, and serves as a key measurement of drayage performance. Turn time depends on several factors, such as: location specific conditions, distance, drayage strategy, on-terminal chassis supply, congestion on strategic points, and trouble tickets. Main causes of long turn times:
Increase of container volumes, more containers per one ship (up to 10,000 reload containers) slow down pick-up process.
Chassis shortage is a common situation in ports, as well as dislocation, when they stuck at inland terminals or parking lots, and truckers need them to move container to DC or warehouse.
Peak volumes with smaller equipment capacity, labor force and parking.
Labor disputes and strikes provoke further delays and congestion.
How do drayage lags affect drivers? Motor carriers won’t be paid by terminals for waiting hours or get paid by ocean carriers for late containers’ return due to congestion. Drayage drivers lose their income, because they are paid by trip between pick-up and drop-off: no one reimburses waiting time. And, of course, drivers are burning fuel, polluting air and losing time, during drayage delays. The drayage industry structure leave no chance for drivers to protect themselves from losses.
Are there any considerable solutions? The drayage industry greatly depends on large market players, like ocean carriers, port terminals, longshore labor and shippers. To overcome a crisis, all parties should communicate and cooperate, sometimes restraining conflicting interests. Specialists say that consolidation of terminal operations into bigger and fewer facilities could be a right move for improving the drayage situation. Large vessels with 10,000 containers could be handled much easier at bigger terminals. There are also promising technologies, aimed to expedite freight flow through shipping facilities: intelligent transportation systems, automated transfer management systems.
Freight management plays a large role in the customer experience, and as you probably know, customer satisfaction is more important than ever. Some companies and e-retailers dedicate their entire business plan to the customer experience. End consumers are now demanding such a high level of service that the whole supply chain environment is changing to accommodate them. The customer is and always will be a priority, but now customers of B2C and B2B businesses are demanding very similar things.
The bill of lading (BOL) is a legally required document that must be completed before a freight shipment is hauled. A bill of lading protects both the carrier and the shipper. The document contains detailed information on the type, quantity and destination of the goods being carried. It is issued by a carrier and given to the shipper of goods.
The BOL serves three essential purposes:
It is a receipt for the goods shipped
It evidences the contract between the carrier and shipper
It serves as a document of title.
There are 2 basic types of bills of lading, a straight BOL and an order BOL. Understanding the difference between these BOLs is important because it determines whether the document is negotiable and what terms are defined for delivery.
The bill of lading should be provided to the carrier at pick-up or arrival and will be delivered to the receiver or consignee at delivery. It provides the driver and carrier with all necessary information to process the freight shipment and invoice it accurately. The BOL must specify any and all details of the shipment.
What information must be included on the bill of lading?
Shipper and receiver (or consignee) names and complete address.
The date of the shipment.
The number of shipping units.
The freight classification.
The exact weight of the shipment. If there are multiple freight units, then each item’s weight must be listed.
Type of packaging, including cartons, pallets, skids and drums.
A description of the item being shipped, include the material of manufacture and common name.
PO or special account numbers used between businesses for order tracking.
Special instructions for the carrier.
A note if the freight is a Department of Transportation hazardous material. (Special rules and requirements apply when shipping hazardous material.)
The declared value of the freight being shipped.
3 major roles of a bill of lading form:
As a receipt of the goods The BOL is issued by the carrier to the shipper in exchange for the receipt of the cargo. This is proof that the carrier has received the goods from the shipper in apparently good condition.
As evidence of the contract between carrier and shipper As evidence of contract, a BOL is the contract of carriage entered into between the carrier and shipper in order to transport the freight as agreed upon by the buyer and seller.
As a document of title to the goods A document of title means the freight can be transferred to the holder of the BOL. Now, the holder of the BOL has the right to claim the goods to be transferred to another.
What is the Difference between a BOL and Freight Bill?
The bill of lading and freight bill are similar documents; however they should not be confused. Unlike a BOL, a freight bill cannot serve as evidence in a claims dispute or shipping mistake. The information on a freight bill should be similar (if not the same) to the BOL, but it also includes extra information on accessorial charges, fees and notes to clarify any data on the BOL. Freight bills are an invoice that can be assessed by 3PLs or an internal logistics team; they show room for improvement in costs, solutions and time.
Types of Bills of Lading
Straight Bill of Lading: a non-negotiable bill of lading used where the goods have been paid for or do not require payment. The shipping company will deliver the shipment to its consignee upon confirmation of identification. This is also known as a consignment bill of lading. Order Bill of Lading: a document that is issued to the order of a shipper or consignee for the delivery of goods. This bill of lading can be transferred by endorsement to third parties. Negotiable Bill of Lading: a negotiable BOL can be transferred by its consignee to a third party through signing (endorsement) and delivering it to another consignee. The new consignee can transfer the document again, and so on. In order to issue a negotiable BOL, it must be written “to order” of the consignee and must be clean. Claused Bill of Lading: a BOL that shows there has been damage to the delivered goods. If something is missing or goods are damaged, the carrier may have difficulty receiving payment. Electronic Bill of Lading: paperless version of the bill of lading.
Regulations on BOL
In the fall of 2013, the Federal Motor Carrier Safety Administration (FMCSA) issued rules over freight brokers operations and how they fill out the bill of lading. Under these guidelines, brokers are required to post a $75,000 surety bond that guarantees payment to motor carriers receiving loads if the broker fails to make payment.
The rule also eliminates “double-brokering.” Double-brokering is when a driver takes ownership of freight from another driver or broker. Truckers cannot broker freight without a brokerage license, and the freight brokerage must be a completely separate entity from the carrier.
When a driver gets to the destination to pick-up freight, the freight broker must ensure that the driver is with the same trucking company as arranged on the BOL. A broker can never appear on the BOL as the carrier. If there is a discrepancy, the shipper or broker must create a new BOL and identify the driver and carrier.
The FMCSA’s rules detail what is acceptable and unacceptable in the relationship of carriers and brokers. The rules provide shippers peace-of-mind that the carrier on the bill of lading will be the same one that hauls their freight.
Consequences of an inaccurate bill of lading
Product doesn’t make it to destination.
Loss of the right to limit liability.
Loss of P&I cover.
Loss of the right to indemnity from the charterer.
Mistakes Shippers Can Avoid on BOL
Not describing the freight correctly. Be thorough in your description of the freight.
Not being specific enough on freight and product count. You must specify the number of containers, and sometimes you have to specify the number of goods in each container. Be sure to clarify items versus pallets, and so on.
Not identifying hazardous materials. If you deal with hazardous materials, be sure to take responsibility for shipping the product safely. Do research to learn if you have hazardous materials, and properly label the BOL.
Not communicating the carrier requirements for the shipment. Make sure you are providing the information required. Ask, if you have to, and plan ahead so that you can avoid expensive errors.
Not referencing the correct contact numbers or service numbers. Include the service contract number in the paperwork. BOLs are evidence of carriage, so if terms differ, it can cost you money. Make sure your contact information is correct in case questions arise during the transport.
Not completing the BOL. Double check that all required fields have been filled out properly.
Not understanding the terms on the BOL. Read through the document and make sure you understand what you are responsible for.
How to keep a consistent and accurate bill of lading
The information within the BOL must be clearly written or typed in the space provided. Given the importance of this shipping document, the information must be filled out accurately every time. Use the same bill of lading form consistently, then you will become familiar with the information you need. It’s helpful to refer to a transportation management system (TMS). Eliminate risks by quickly and easily filling out your BOL online. Using a TMS, you are required to fill in all fields which decreases the chance of error. And of course, always double check the information before sending the BOL.
Generating the BOL with Technology
Today, most leading technology platforms or transportation management systems allow you to electronically complete the bill of lading. This not only requires less time, but it also increases accuracy as many of the fields are prepopulated based on historical data within the system. In addition, shippers, carriers and 3PLs are notified automatically if any critical data fields are missing or incomplete. .
Technology makes filling out the BOL easy, convenient and quick. Through TMS technology, there’s less risk that the BOL will be filled out incorrectly, leaving you free of extra charges and headaches.