There are several times throughout the year, especially during peak holiday shipping seasons, when freight volumes are significantly high, and capacity is extremely tight. This happens quite often on the West Coast. According to Port Technology International, recent labor unrest on the East Coast has the potential to severely impact freight at East Coast ports. This potential disruption has led to several East Coast shippers diverting freight to the West Coast to minimize the impact, even at the risk of significantly increased costs.
But what does this mean for you?
It could get ugly if you are moving freight in or out of the West Coast. The major risks include cargo theft, late deliveries, poor carrier performance, additional costs at the port, increased overall costs, double brokering, and much more. Let’s break this down a little.
Cargo Theft
Criminals will focus on areas where people are the most desperate so they can exploit this desperation to secure loads of freight. When customers can’t get their freight moved, this puts a lot of pressure on their brokers. Brokers may worry that the customer will go to a competitor or find another means to move their loads. Inexperienced brokers may become desperate to secure capacity and book freight with fraudulent carriers who target these vulnerabilities to get their hands on cargo. These “fake carriers” may also be working in conjunction with real carriers involved in crime to help move freight to cross-dock warehouses, where it disappears. It’s extremely difficult to recover stolen freight once it’s in the hands of criminals.
Late Deliveries
Most shipments come with an expectation of when they will be delivered. For example, we handle a lot of “event freight” that has a strict deadline. Tight capacity means there simply aren’t enough trucks to handle the volume of freight, making it extremely difficult to meet delivery expectations.
Poor Carrier Performance
This goes back to broker and shipper desperation. Low-grade carriers that typically operate poorly know that people will be desperate to book loads. This allows them to secure loads at much higher rates than they could during normal capacity timeframes. Many of these carriers have poor track records, including operational violations, drivers with bad records, unpaid claims, hostage load incidents, and double brokering reports. Despite this, someone will give them freight, as they prey on inexperienced brokers under pressure.
Additional Port Costs
Contrary to popular belief, there isn’t an unlimited number of drayage carriers at the ports. During high-volume periods, drayage operations will experience the same capacity constraints. There will simply not be enough equipment to pick containers up at the port in a timely manner, leading to significant costs such as demurrage charges. The ports are not going to offer any breaks just because volumes are high—they will still expect payment.
Increased Overall Costs
Imagine you’re a carrier waiting in a parking lot where there are 20 loads per truck outbound. Are you going to take the first offer that comes across, or will you wait and see who’s willing to pay more? If you chose to wait, you’d be right. Costs will skyrocket when capacity is tight because it’s a carrier’s market, allowing them to dictate their rates. This means you’ll end up paying much more.
Double Brokering
Tight capacity is a prime opportunity for double-brokering scammers. These fraudsters pose as legitimate carriers and secure loads at lower rates. Once they’ve secured the load, they double-broker it to actual carriers in the area with a much higher offer, allowing them to quickly bill the freight and hopefully get paid fast. Unfortunately, they never intend to pay the carrier that actually hauls the freight. However, this doesn’t mean the carrier won’t get paid—shippers and receivers are still responsible for the freight charges.
Protecting Yourself
Now that we’ve discussed the problems, let’s focus on how you can protect yourself.
Understand the Risk Zones
Some areas are more prone to the issues mentioned above than others. For example, Long Beach, L.A., and the Inland Empire are hotspots. Being aware of these areas allows you to plan routes that avoid risks or take extra precautions.
- Route Planning: Work with your logistics provider to plan routes that avoid high-risk areas.
- Security Tracking: Use GPS tracking and geofencing technology to monitor your shipments in real time and receive alerts if your freight veers off course or enters a high-risk area.
Work with Reputable Carriers and Brokers
Not all carriers offer the same level of security, and not all brokers have the same level of expertise. When freight volumes are high, there’s a temptation to choose the quickest or cheapest options. This is dangerous. Stick with carriers and brokers with strong track records of success, safety, and reliability.
- Vet Carriers: Partner with trusted logistics providers that conduct background checks on drivers and MC numbers, invest in security, and have theft-prevention protocols in place.
- Request Details: Ask about security measures such as locked trailers, team drivers, and secure parking locations. Ask your broker for the carrier’s MC numbers so you can verify them. Get access to tracking links.
Strengthen Your Packaging and Labeling
Improperly labeled or poorly packaged freight is more likely to catch a thief’s attention. Freight that looks valuable or is easy to access is a prime target.
- Discreet Labeling: Avoid using labels or packaging that indicates high-value goods. For example, a pallet of iPads should not advertise its contents.
- Seal Integrity: Use tamper-evident tape and seals to secure your shipments. Thieves are less likely to target a shipment with visible countermeasures.
- Use Portable GPS Tracking Units: Placing a portable GPS tracking unit in with your freight is a great way to identify issues if they arise.
Consider Additional Cargo Insurance
A common misconception is that carrier liability is cargo insurance. It simply is not, and this leads to many denied claims. The key difference is that with carrier liability, the shipper is responsible for proving the carrier is at fault for damages or theft. With insurance, you only need to prove that the damages or theft occurred while the freight was insured.
- Evaluate Your Coverage: Make sure your coverage is up to date. Request carrier insurance documents and negotiate full-value cargo insurance (we provide that, by the way).
- Maintain Thorough Documentation: Ensure that all shipping documents, especially the Bill of Lading, are accurate and clear. This will help you greatly if you need to file a claim.
Invest in Advanced Technology or Partner with a Broker That Can Provide It
Technology can be a game changer in preventing theft and ensuring timely deliveries. Real-time tracking systems can alert you or your broker if a shipment is off course, allowing you to address issues quickly with the carrier.
- GPS Tracking: Ensure your logistics provider uses GPS tracking and has real-time or near-real-time tracking ability.
- Smart Locks: These devices allow only authorized personnel to open trailers.
- Telematics: These systems can track your cargo’s location and condition.
- Seals: Always use them. We’ll give you free seals if you need them when you ship with us.
Partner with a Reliable Logistics Provider
The best way to ensure the security of your freight and prevent delays or other issues is by partnering with a logistics provider that prioritizes your specific needs. At Firehouse Freight, we understand the challenges businesses face during high-volume periods. We work closely with our customers to provide live tracking, trusted carriers, and solutions that minimize risks and protect your business.
What We Offer
- 24/7 Tracking Support: Our Track and Trace team monitors your shipments to ensure your freight stays on course and issues are dealt with quickly.
- Secure Carrier Network: We partner with highly vetted carriers that meet the standards of operation we promise our customers.
- Customized Solutions: We offer a wide range of services and can seamlessly combine multiple modes of transportation to keep your freight safe and delivered on time.
Final Thoughts
Logistics can be stressful even under normal circumstances, but even more so during low-capacity, high-volume periods. By taking proactive measures, you can significantly reduce risks to your freight and your customers. We’re here to support you with comprehensive, secure solutions designed to exceed your expectations.
If you have concerns about your upcoming shipments or want to learn more about how we can help you protect your cargo, contact us. We’re standing by to assist.
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