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Dedicated Fleets – 2022 Capacity and Value

Posted - May 17, 2022

Elisabeth Kilby, Transplace Transportation ManagementBy: Elisabeth Kilby, Transplace Transportation Management

The Value of Dedicated Fleets

Dedicated fleets have always been a potential source of truckload capacity for shippers but have become even more valuable during the current tight market. After years of unprecedented premium spot market rates and low primary tender acceptance, shippers are evaluating where they can implement new dedicated fleets while maximizing the benefit of existing ones.

Dedicated fleets are often considered for their cost saving opportunities and the ability to guarantee service for high-density customers. As consumer demand trends continue to stay strong into 2022, alongside the ongoing driver shortage, shippers should evaluate all capacity options to get ahead of the curve.

Maximize Fleet Value with Lane Fit and Fleet Sizing

While the goal of a local fleet is to run short hauls and return home, longer lanes should have a backhaul load to offset the cost of round-trip miles paid to the carrier. Investing in a dedicated fleet can be a long-term solution that provides endless value to your transportation management. To implement a dedicated fleet, a shipper must have freight density and consistent flow of volume in a targeted shipment area. Fleet management should target no more than 10-20% empty miles to meet industry standards for a regional fleet. Dedicated fleets can be evaluated for high-mileage lanes but should only be implemented if backhauls are heavy, consistent, and scheduled favorably for drivers while meeting utilization goals.

To help maximize fleet value and expand the potential fleet lane fits, shippers can partner with external networks to find more backhauls. Highly efficient shippers implement programs that provide backhaul solutions including planned continuous moves and dynamic continuous moves. Transplace Lanehub provides planned continuous moves by matching our dedicated fleet lane network to live RFPs that may have a useful backhaul out for bid. This allows shippers to effortlessly secure backhaul freight to reduce empty miles and optimize fleet utilization. Transplace Dynamic Continuous Moves is powered by AI and enables dedicated fleets to find backhauls without a permanent commitment to a given lane—allowing the fleet to fill empty miles on an ad-hoc basis. It’s important to maintain balance between prioritizing backhauls and picking up the driver’s next load—both need to be considered and optimized daily.

Shippers can also ensure less volatility in the load tendering process by taking advantage of Uber Freight’s committed capacity feature offered to carriers. This feature opens opportunities for carriers of all sizes, allowing them to lock-in loads across 1,000-plus dedicated lanes and plan their operations up to three months in advance. In tandem, shippers can also turn to Uber Freight’s direct API integrations to bring real-time pricing and instant capacity within their transportation management systems, leading to reduced overhead costs, increased revenue and flexible, scalable operations.

Other Active Fleet Management Success Factors

Long-term success requires on-going monitoring of the fleet’s health to provide direction for continuous improvement, including considering the following:

  • Engineered KPIs: Set and measure KPIs appropriate for each fleet type and fleet. Are turns or average miles per week the critical KPI? Percent backhauls by fleet? Do seated trucks count? Modify targets two to four times per year for realistic, but challenging targets.
  • Develop a dashboard for each fleet that reports utilization by truck, truck count, empty mile %, heavy haul %, and cost allows for a full picture of fleet performance. Every fleet in the network should be represented in one centralized view.
  • Cost-out Initiatives: Be creative when thinking about what cost-out initiatives to implement. Consider using drop trailer space at the shipper and receiver locations for more efficient loading and unloading. Is a third shift available for the driver to begin slip seating? Other popular cost-out initiatives include: equipment utilization (average weight/cube per load), dwell time, domiciled trucks, scheduling optimization, backhauls and collaboration.
  • Fleet Administrative: Manage fleet contracts as living documents and update as necessary. Audit invoices to contracted rates to ensure costs are accurate.
  • Fleet Lane Fit Analysis: Regular continuous improvement calls and monitoring KPIs are necessary to get the most out of your dedicated fleet capacity and to determine which lanes are the best fit. Review quarterly or semi-annually with a detailed analysis.
  • Preferred Mode: Dedicated fleets should be viewed as a preferred mode. Fleet trucks should be prioritized in routing guide placement, appointment setting and provided drop space to maximize efficiency.

To learn more about Transplace’s dedicated fleet support, dedicated fleet assessment, and dedicated fleet engineered KPI dashboard services connect with a Transplace expert.