Monthly Archives: September 2009

Intermodal Rail Traffic Down: Rate Savings Increase

The economic news from America’s freight industry associations lately has not been entirely uplifting to say the least. Everywhere we turn, there is a new report regarding decreases in freight traffic and earnings. This month was no exception.

Intermodal rail traffic in the United States fell 16.5% during the last week of September from the same week a year ago, accordingly to the Association of American Railroads. Providing specific unit numbers, the AAR advised that total intermodal freight volume dropped to 205,627 units, compared to 246,280 last year.

Of this decrease, containers fell 11% to 173,272 units, while trailer volume plummeted 37.2% to 32,355 units.

Excluding intermodal traffic, freight rail traffic itself fell 17.1% compared with last year. Railroad volume is considered an important economic indicator due to its direct relationship with manufacturing. Despite these rather depressing numbers, most economists are projecting freight industry growth for 2010.

In the meantime, Freightquote.com is keeping its freight shipping customers happy by leveraging the railroads’ empty cars. The lower freight volume has translated to reduced domestic rail freight rates for shippers. Freightquote’s instant online quote system – plus its established position within the industry – allows customers to compare several different shipping options and prices before booking a load.

Freightquote is able to negotiate the best rail and intermodal freight rates for its customers due to a substantial and regular volume of booked shipments. Carriers are competing to fill their containers, trailers and rail cars. Freightquote’s system puts its customers in the best possible position to take advantage of the current situation.

When, the economic climate makes its projected gains in 2010, Freightquote will still be out front, ahead of the pack in negotiating new rates, always ensuring that its shippers are able to compare the market’s best available rates at the click of a button.

The Surface Transportation Authorization Act of 2009 – “The Highway Bill”

An interesting coalition of organizations representing shippers, transportation providers and government agencies is calling for the creation of a cohesive national freight strategy as part of the six-year Surface Transportation Authorization Act of 2009, also known as the “Highway Bill”.

The Highway Bill is currently up for debate in Congress .

If one is to believe the authors of the bill, it is intended to “transform Federal surface transportation to a performance-based framework to reduce fatalities and injuries on our Nation’s highways, address the mobility and access needs of people and goods, improve the condition, performance, and connectivity of the United States intermodal surface transportation system, provide transportation choices for commuters and travelers, promote environmental sustainability, public health, and the livability of communities, support robust investment in surface transportation, and for other purposes.”

The bill opens with that grandiose statement of purpose but critics are concerned that it doesn’t adequately address freight transportation. The Freight Stakeholders Coalition believes that substantial investment in the freight transportation system must be given a high priority by the U.S. legislature.

The Senate’s Environment and Public Works (EPW) Committee almost unanimously approved an 18-month extension of federal highway programs from October of this year through March 2011, giving Congress a bit of breathing room to revise the existing bill. The coalition though believes that the delay indicates that freight issues are being pushed to the bottom of the President’s priorities.

Janet Kavinoky from the U.S. Chamber of Commerce noted that “[f]reight is an issue that should be at the top of the nation’s priority list – but it is not. No matter the differences among industries as to what needs the most funding, we all recognize 18 months is too long to wait to pass a reauthorization bill. What do we need more time for? There’s enough information out there about what we need to do to fill this room 10 times over.”

“The only thing we need time for is to make transportation and freight policy a priority,” she said. “The health care debate has sucked all the oxygen out of the room. But there must be time for us to work on more than one issue critical to our future.”

Currently, the bill addresses the creation of an inclusive freight plan covering roads, rails and ports. However, funding appears to cover only the expansion of highway capacity for freight – ignoring rail freight.

Freightquote.com books an enormous volume of both rail and road freight (as well as intermodal shipments). Freightquote is hopeful that Congress recognizes the importance of freight transportation – both roadway and railway – to this country’s economic recovery and addresses both bill language and funding to the creation of a completely inclusive freight plan as part of the Highway Bill.

Efficiency in Freight Through Technology

The shipping process – heck, the whole transportation industry – is large, complicated and extremely rooted in tradition.  As technology has become refined over the last decade, especially at Freightquote.com, some of the inefficiencies which were formerly unavoidable in shipping have been resolved. Shipping cannot function well based on technology alone however.

Freightquote’s outstanding freight quoting and freight management technologies are supported by an experienced and talented staff with a deep knowledge of the industry and a commitment to Freightquote’s customers.

The technology though is the cornerstone of Freightquote’s system. Leaders in the online movement of the freight industry, Freightquote continues to develop better and more efficient technologies to help its shippers do more with less. In the current economy, the savings achieved can be essential to keep a business on track. Even a seemingly small monthly savings on freight costs can be important to the bottom line of a small- to medium-sized business.

There are a number of freight transportation cost reductions available.

Freightquote’s online  system can quickly identify multiple shipping options for every shipment – allowing a shipper to compare them side-by-side, looking at cost, service level, delivery time and more. Freightquote allows shippers upfront consideration of surcharges, accessorials, minimums and other minutiae of freight billing that can really add up.

And utilizing Freightquote’s technology costs nothing. No software to purchase. No IT consultants or programmers to pay.

Freightquote’s unique online system allows for very accurate quotes and simple comparisons. This, plus Freightquote’s relationships with hundreds and thousands of available, reputable carriers and Freightquote’s tremendous shipping volume, result in immediate savings in transportation costs.

Additional savings are undeniable when shippers consider the time saved by using Freightquote’s technology. No longer do transportation managers have to bounce from carrier to carrier to obtain quotes and negotiate rates.

Freightquote does that in the click of a button.

No longer do shippers have to make multiple follow-up phone calls to book loads and track shipments. No longer do shippers have to reconcile multiple shipping invoices to internal records before cutting multiple checks for payment to multiple carriers. No longer do they have to navigate damage claims on their own. All of this is handled simply and efficiently via Freightquote’s online freight management system. The time savings are unbeatable. And time is money, especially in this economy when businesses are striving to do more with less at every level of commerce.

Improved Demand for Air Freight in August

The International Air Transport Association (IATA) announced that international air freight demand fell by 9.6% in August 2009, compared to August 2008. Market watchers were quick to note that this year-on-year decline was still an improvement compared to the 11.3% drop in July.

Compared to the low point of December 2008, seasonally adjusted freight demand has improved by 12%. Unfortunately, international air traffic is still 16% below April 2008 levels when the fall in demand began.

Freightquote.com books a substantial amount of international air freight through its online freight management system. Just as the IATA reported, Freightquote saw all regions experience improved demand in August compared to July. The strongest markets for international air freight appear to be Latin America and the Middle East. Both regions reported growth between 3.9% and 3.0%.

Asia Pacific carriers, representing 44% of the global freight market, saw a mild improvement from July to August. Europe also experienced similar increases. The region with the most impressive month-to-month improvement was Africa but there is ultimately little effect on the international market due to Africa’s small market share.

These numbers are enough to support optimistic industry projections for 2010. Freightquote.com is excited for the expected growth in 2010. IATA’s industry outlook anticipates average international freight growth of 5.5%, compared to an expected full-year decline in 2009 of 14.5%.

Despite the 2009 decline, Freightquote has succeeded in maintaining a stable volume of shipments as it customers press harder for the best international air freight rates and efficient freight management processes. Freightquote is able to offer both – the best rates as a result of long-standing relationships with a huge number of reputable carriers; the most efficient online freight management processes as a result of Freightquote’s commitment to improved technology and streamlined user interface.

Pay Attention to Freight Surcharges and Fees

Navigating Added Freight Charges

Shippers have surely noticed that discounts offered by less-than-truckload (LTL) carriers have been increasing during the recent economic downturn.  The carriers have used discounts to try to maintain volume during the recession. For many carriers, these discounts have succeeded in luring shippers in.

Unfortunately for many shippers though, they are enticed by a high rate discount but never actually achieve the promised savings. They receive their invoice and discover unexpected, additional charges, accessorials and surcharges. Shippers that use Freightquote.com to compare and book shipments can avoid any surprises when the invoice arrives.

LTL carriers charge an additional fee for any “special services” that they provide. Generally, anything beyond a simple dock pick-up and dock delivery might be considered “special” or unusual.  These extra charges are called “accessorial charges”.

These charges are published in the LTL carrier’s tariff and often include fees for lift-gate pick-up or delivery, residential pick-up or delivery, hazardous materials fees, delay time, convention or trade show deliveries, non-commercial or job site deliveries, re-weigh and re-classification and more.

Fuel surcharges have been ever-present for over a year now. They are generally imposed by carriers when fuel prices reach certain levels and are usually tied to the DOT Fuel Index.

Rather than try to navigate the details of each specific carrier’s tariff, shippers can utilize Freightquote to quote, compare and book a freight shipment. The specifics of the quoted rate are fully disclosed. Any questions about rates, accessorial charges or fuel surcharges can be answered by Freightquote’s freight experts.

Shippers can rely on Freightquote to help them take advantage of the great discounts available in the current marketplace and also to keep from being surprised by unexpected add-ons.

Longtime President To Leave FedEx Freight

The big buzz in the freight industry last month came out of FedEx. Douglas G. Duncan, president and CEO of FedEx Freight from its inception, will retire next February. The announcement took the industry by surprise.

FedEx Freight was created in 2001 – just a few years after Freightquote.com – via the acquisition and merger of American Freightways and Viking Freight. Duncan had been the head at Viking, having previously worked at several other freight companies including Roadway.

Under Duncan’s leadership, FedEx Freight became one of the country’s leading non-union less-than-truckload (LTL) carriers. It is the second largest LTL operator in the country, after YRC Worldwide.

Many in the trucking industry view the creation of FedEx Freight as the beginning of a major shift in LTL. The major unionized carriers at the time – Yellow, Roadway and Consolidated Freightways – began to lose some ground to non-union lines.

The already established global FedEx brand, along with the company’s unmatched (at the time) spending on technology and service enhancements, forced other LTL carriers to rethink their businesses. (Consolidated Freightways folded in 2002, and Yellow Corp. acquired Roadway in 2003 to create what is now YRC Worldwide.)

The landscape of LTL freight hauling changed fairly dramatically during Duncan’s leadership at FedEx Freight. Much of it is related to the direct effect of the internet and companies like Freightquote.com but substantial credit should probably also go to Duncan’s work at FedEx Freight. His tactical decisions and investment in technology quickly made FedEx a huge player in the LTL game.

Freightquote.com is proud to count FedEx Freight among its most valuable partner carriers. Freightquote works with only the best and most reputable carriers – and FedEx Freight certainly fits the bill. We are confident that FedEx under Douglas Duncan’s successor will continue to be an industry leader and a provider of high quality, reliable service.

ATA announces August Freight Tonnage Increase for August 2009

The freight industry posted another gain in the month of August, with a 2.1 percent (adjusted) increase over July’s freight volume. Compared to August 2008, freight tonnage was down 7.5 percent, which is a decrease but it was the smallest decrease since last November.

The American Trucking Associations released the industry numbers and speculated that they were attributable to a growing economy and more balanced inventories across the nation.

ATA’s economists believe that the upward trend will continue but will likely not be as sharp as July and August’s numbers. “While I am optimistic that the worst is behind us, most economic indicators, including industrial output and household spending, suggest freight tonnage will exhibit moderate, and probably inconsistent, growth in the months ahead,” ATA’s chief economist said.

Freightquote.com is bolstered by these predictions but has been able to weather the economic downturn by increasing efficiencies, improving technologies and leveraging the situation to customers’ benefit.  Those customers, in turn, recognize the value that Freightquote provides and ship more volume using Freightquote.

So, despite the relatively depressing first three quarters of 2009, Freightquote has expanded its services and enabled many shippers to save money by finding the best rates and most efficient shipping options. By enhancing its customers’ ability to function in this market, Freightquote has largely avoided being affected by the slowdown. These increased efficiencies will continue to serve Freightquote well as the market begins to recover.

Freightquote is excited to hear industry analysts predict an upswing in late 2009 and 2010. The company will continue to contribute to that upturn by working with its customers to book the most economical and reputable shipping available, both domestically and internationally..