Making the most of your freight vehicles and drivers is a constant
challenge for all trucking companies, large and small.
And that’s especially important in an economy where the competition
on price is increasing all the time. In 2019, increasing price pressure from
competitors was a significant challenge for 41% of trucking companies and 38%
of shipping companies.
Load planning, when done right, can help you to compete on price.
It can help lower your mileage, improve your delivery capacity,
and (ultimately) reduce your overhead and increase your profit margins.
In this article, we’ll dive into what load planning is, what it
can do for your company, and the best ways to implement it in 2020.
What we’ll cover:
What is load planning?
· 4 primary responsibilities of a load planner
· The problem with traditional load planning
· 8 benefits of combining load planning with route optimization
· Load planning FAQ
· Combine load planning and route optimization
What Is Load Planning?
Load planning is the process of consolidating and optimizing the
packing of cargo into a single truck or delivery vehicle. The ultimate goal is
to move as much cargo as possible with the lowest number of vehicles.
But it’s not as simple as squeezing the maximum number of pallets
into a container. You need to consider the vehicle’s specifications
(refrigeration, for instance), center of gravity, destinations, type of
product, and much more.
4 Primary Responsibilities of a Load Planner
Your business’ load planner has the responsibility of improving
the efficiency of your entire operation. Maximizing the capacity of your fleet
is the key to more efficient outbound logistics, reduced overhead, and
bottom-line business growth.
That being said, there are four primary responsibilities that are
higher priority than others.
#1. Maximize the capacity of each truck and driver
A load planner must be able to mix and match loads based on cargo
type, destination, size, and vehicle capacity.
For example, they have to mix larger packages with smaller loadsfor optimal space utilization while also considering the destination of eachpackage (when it’s unpacked), the weight and balance, giving sensitive cargothe protection it needs, sharing loads between drivers and more.
They also have to consider whether palletized cargo is the right
choice or whether to use a different loading process.
All this, and more, to ensure that each shipment safely reaches
its destination on time.
#2. Comply with regulations
35% of truckers find complying with new regulations an ongoing
challenge. With a sophisticated approach to load planning, that considers
vehicle characteristics and not just basic capacity, you can ensure compliance
for all your trucks and loads.
If only a few trucks are refrigerated or certified to ship
non-radioactive hazardous material (NRHM), you have to balance all relevant
loads between them.
In addition to that, when you load orders into a truck, youeffectively commit that truck and driver to a certain workload. If the loadplanner underestimated the required time, the driver would face a choicebetween violating hours of service (HOS) regulations or delivering a loadbehind schedule.
#3. Cut unnecessary costs
It’s not just about squeezing as much cargo into a single truck as
possible. A load planner should also consider factors like loading sequence,
destinations, driver overtime, and more.
Bad load planning leads to more trucks and drivers than required
in action at any given time. Unforeseen delays can also cause shipments to need
to be repeated, which causes additional mileage, overtime, and more.
#4. Create productive partnerships
As an LTL carrier, if you want to expand your business to new
routes, a single ongoing contract probably won’t be enough.
By partnering with other trucking companies that cover the new
area, you can expand your operations and increase revenue without the ability
to send a fully loaded truck on a route.
The Main Problems with Traditional Load Planning
Even combining similar loads to a single location is complicated
when you have different deadlines and truck capacities.
With a variety of clients, destinations, and cargo with different
requirements and regulations, it’s an impossibly complex task. Doing everything
manually is not a good idea.
#1. Manually planning and sequencing orders is time-consuming
There are a lot of factors to consider, from cargo requirements
and vehicle characteristics to how you group destinations together. With a
traditional, manual approach to load and route planning, you end up with a lot
of operational overhead.
Even in a mid-sized company, you probably need multiple people on
the job, especially if you still rely on older solutions, or worse, Excel
spreadsheets.
#2. Failure to consider driver workloads and overtimeA traditional approach and old load planning systems don’t factorin other expenses like driver overtime and workloads. That means you have tomanually audit and adjust any generated plan.
#3. Manually planned routes are inefficient
Even if you have a dedicated team planning your routes, these
routes are rarely efficient. Your drivers will spend unnecessary working hours
and gas by following these directions.
8 Major Benefits of Combining Load Planning with Route Optimization
Instead of handling load planning and route optimization
separately with different tools and spreadsheets, your company will see the
biggest ROI by combining both.
#1. Increase delivery capacity
By combining load planning with route optimization, you get the
benefit of increasing the efficiency of your routes and always loading the
right cargo in the ideal order.
Before using a route optimization tool, Hardie’s Fresh Foodsstruggled with maximizing the capacity of their fleet. After making the switch,more efficient planning and route optimization helped them improve theirdelivery capacity by 14% — an extra 330 loads every single day.
The new tools and planning process allows them to handle higher
demand without increasing their fleet or workforce.
#2. Save time
No more manual number crunching is necessary for mapping out the
most efficient delivery route or picking the right truck and driver for a load.
Bee Imagine, a third-party logistics (3PL) provider based in
Southern California, uses route optimization software to cut down on labor
costs, and quickly adjust to last-minute orders and instructions from clients.
“This software will cut down on labor hours considerably. We’d had
issues with our client sending the list of stops late at night, requiring
planners to accumulate overtime as manual routing took up to 4 hours”. –
Luis Flores, Bee Imagine
#3. Save on shipping and delivery costs
Fewer vehicles and drivers on the road for a shorter amount of
time mean lower costs per load and higher profit margins.
Hardie’s Fresh Foods reduced total mileage by 20% and also saw a
12% reduction in driver-related costs.
#4. Require fewer stops
By taking a holistic approach to optimizing your routes and loads,
your drivers can unload their cargo load in fewer stops.
#5. Deliver more quickly
With the shortest possible routes and fewer stops, you can deliver
your cargo quicker without breaking any rules or regulations.
#6. Provide positive customer experiences
Faster shipments at no extra cost mean that you make your
customers happier, and potentially retain them for longer without having to
compromise on price.
#7. Reduce overtime and provide balanced workloads for divers
By effectively distributing the workload, you can reduce overtime
costs and provide a healthier working environment to your drivers.
#8. Remain profitable while offering competitive pricesIn an industry where competing on price is a fact of doingbusiness, lowering your delivery and operational costs is a must to protectyour profit margins while keeping your customers.
More efficient loading and routing make a tremendous difference —
reduced mileage and driver costs combined with increased delivery capacity mean
much healthier profit margins. You can offer competitive prices and win new
business without sacrificing profitability.
Load Planning FAQ
Below, we answer some of the most frequently asked questions about
load planning and related topics.
What is load planning software?
Load planning software is a tool that lets operations managers and
small business owners plan what items or units belong in which trucks and
routes without any manual calculation.
With much less work, it ensures that every truck carries the ideal
truckload when it leaves the loading dock. Using a solution that interacts with
your warehouse management system can streamline your process even further.
What is load optimization?
Load optimization is the art of optimizing the specific loads in
each vehicle, typically with the help of a dedicated software tool. Modern
systems can consider millions of factors from vehicle capacity and
characteristics, to individual load requirements, and destinations.
Because software is a key component of load planning these days,
the terms load planning and optimization are used interchangeably by logistics
experts and software providers.
What is a load tender?
A load tender is a negotiable offer of cargo or pick-up-request
issued from a shipper to a carrier. It includes all necessary details like
delivery numbers, freight terms, dock times, and more.
The term is primarily used in the motor industry.
Combine Load Planning and Route Optimization
Even when done in a vacuum, load planning and optimization can
have a significant impact on the freight cost of shipping your goods. It makes
sure that your LTL loads are distributed more effectively across a lower number
of trucks.
But if you genuinely want to take your trucking business into the
21st century, you need to centralize your data. By combining loading planning
and route optimization, you can make sure that all your loads are shared and
sequenced out based on the ideal route for each truck.
You can also better manage your workforce with workload management
tools, real GPS routes, and long-haul multiple-day truck route planning and
tracking.
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