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What Is Truckload Lead Time In Shipping & Why Does it Matter?

In truckload shipping, capacity for a fair price is what companies and logistics providers are searching for. Sometimes it can be easy to find, but most of the time it can be a challenge. Even with all the available trucks in the U.S., almost two-thirds of them are already driving, loading or unloading someone else’s freight, which can complicate finding a truck for a good price. There are several factors that define your success in getting the required capacity on-time, and one of them is truckload lead time in shipping.

What is a lead time in shipping? Truckload lead time definition

Lead time can be defined as a time period from the day an order was made to the pick-up date, which basically indicates the time to book a truck. The longer the lead time, the better it is both for a shipper and a carrier. Long lead times can provide substantial cost savings for companies, and improve consistency for the carriers. According to the latest study, delivery speed is a top-priority concern for the customers, and longer lead times can improve that KPI.

Why is a lead time in shipping important?

Planning in advance is a useful skill in many areas, and truckload shipping is not an exception. Providing longer lead times offers you, or your logistics provider, some benefits in terms of searching and booking the best option for transportation.

Why longer lead times are better

Lower costs

Most carriers are interested in having pre-planned loads for a certain period of time. That’s why unplanned, on-the-spot shipments are charged more. On the contrary, the earlier you are booking, the lower the price will be. This is a good solution to cut costs per shipment by just extending your lead time by several days.

Ability to choose the top carriers

Extended lead time also drastically increases the pool of carriers and equipment to choose from. This can mean a higher quality of service, or an ability to find the carrier for specific requirements. When you don’t book the capacity earlier, all your competitors will do it for you, and the pool of opportunities will shrink.

Accurate delivery times

Generally, you have more control over the shipment if you’re booking it earlier. If you or your 3PL secures carriers in advance, you ensure better performance, less room for delays and disruptions, and accurate pick-up and delivery times. In the long run, it will positively affect your performance and customers’ satisfaction.

Ultimately, many other factors affect lead time, from the customer service department to supply chain issues. To really define the savings potential, you should consider all aspects.

How Shipping Lead Time Impacts Freight Rates

What is a lead time in shipping?

The lead time in shipping is the time gap between the initiation of the order to the complete execution. For example, it is time an object travels from the primary supplier to the final receiver. The concept of lead time when booking loads is a commonly overlooked factor when delivering freight efficiently and economically.

Why shipping lead time is important?

Providing more notice days or lead time for a shipment could help lower costs. Extending shipping lead time can be beneficial in many ways, including:

  • Lower rates
  • More capacity
  • Preferred carrier availability
  • Access to ideal delivery appointment times
  • Higher service levels
  • Better on-time performance
  • Fewer surprises
  • More control over expenditures
  • Possible identification of new savings and efficiencies

The role of shipping lead time in your supply chain
lead time

To put it simply, the more in advance a third-party logistics provider (3PL) books a load, the more time and control they have over the following:

  • Negotiating pricing
  • Finding savings or efficiency improvements
  • Securing top providers
  • Scheduling ideal delivery times

Whereas on the other hand, when working to book a truck for next-day delivery, capacity is tighter, prices are usually higher and fewer delivery options are available.

In addition to these basic principles, more time between when an order is scheduled and when it’s picked up allows your logistics provider to play more of a consultative role. Instead of immediately responding to a request, they can analyze the potential for more cost savings and efficiencies. This could include suggestions to switch from truck to rail, try new order consolidation techniques and/or switch up network configuration.

Final thoughts 

Advanced scheduling is a step in the right direction towards greater visibility, as well as logistics managers having the ability to regulate time in their operations more precisely, which in turn can generate more capacity. That type of visibility goes well beyond the technology used to track and trace pallets and trucks today.

 

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