According to recent industry research, underutilized trailer space remains a significant issue in trucking, with 43% of truckloads moving partially empty in 2023. That’s a lot of empty trailer space, resulting in lost profit!
Consistently finding backhaul freight to complete a round trip is one of the most pressing and ongoing problems that plague the industry. Trucks typically make the most revenue on the fronthaul, but they can easily lose the profit it generates if the truck returns home empty. It’s estimated that companies can lower transportation costs between 9% and 15% through backhauls.
For this reason, carriers search daily for suitable backhaul freight, often relying on various strategies to fill capacity on the return trip.
Finding fronthaul loads is relatively easy compared to the real challenge of finding backhaul freight. This article looks at six strategies to secure loads for your backhaul freight.
The Problem
The biggest problem in ensuring a profit on a round trip is often the securing of backhaul freight to cover costs on the return journey. To correctly calculate the financial return of a haul, you must consider the profitability of the entire trip. Fronthauls are typically the highest revenue-generating leg of the journey. Deadheading on the way home loses money, so backhauls are opportunities to convert those high-paying outbound loads into money-making roundtrips. Operators who focus on finding backhaul freight to fill inbound capacity do a much better job maximizing their trucking company’s profitability.
The Solution
Overall, the US economy remains positive – GDP growth was stronger than expected in the second quarter of 2024. As retail orders and rates head higher, logistics executives are anticipating the end of the freight recession that followed the Covid boom in transportation. This is an opportunity for truck company owners and fleets to improve equipment utilization with profitable backhaul freight to contribute revenue, rather than losses to bottom line results.
Digital freight marketplaces are the most prevalent resources to help fill empty miles, but the intense competition for backhaul freight limits available opportunities. Trucking companies must establish alternate strategies to secure backhaul freight as much as possible for the return trip.
Strategies to Secure Backhaul Freight
Digging in to find backhaul freight takes time and effort, but the benefits of filling the backhaul far outweigh the time and effort needed to secure those extra loads. The most successful trucking companies utilize several key approaches to accomplish this.
Here are six of the most effective strategies to help secure backhaul freight:
- Work with freight brokers: Freight brokers connect shippers with carriers to get loads delivered – they need your services as much as you need theirs. Be proactive and consistently shop around to find additional brokers with regular freight in the lanes you run. Never rest in your efforts to build a more robust broker network. Freight brokers are your front-line, boots-on-the-ground forces to help secure fronthaul and backhaul freight. To get off on the right foot, verify each broker’s legitimacy, ensure they have experience, and let them handle the legal legwork necessary to move those loads. Then, continue communicating often and clearly to ensure all details are covered.
- Leverage customer relations: A satisfied customer is your best asset in business. Talk to your customers, develop a rapport, and ask for referrals. If you provide quality service, they will likely be happy to refer you to other business associates in their network who may be moving goods into your home territory. In this case, good customer relations will keep the loads coming and may help you generate new leads for backhaul freight.
- Embrace collaboration: Despite typically stiff competition in the freight business, there are times when collaboration between carriers can benefit all parties involved. Trailer interchange agreements are commonly used to increase operational efficiencies on long-haul freight and last-mile deliveries. Establishing collaborative partnerships with other carriers to achieve more elastic capacity can create additional operational flexibility and efficiency for both sides. In the end, working with other carriers could open the door to more fronthaul and backhaul freight opportunities.
- Increase Your Networking: Expanding your network beyond your local industry associates will widen your net of contacts and possible sources of new freight. Consider joining associations in areas where you deliver loads regularly, as they may have members who ship to your territory. Casting the broadest net possible by expanding your network will capture more opportunities to acquire backhaul freight.
- Reduce Backhaul Rates: You undoubtedly made a profit on the outbound freight. Had you not, then you shouldn’t have hauled it in the first place. One way to protect that profit is by getting your equipment home without unnecessary expense. Cutting your rates to win backhaul freight and at least cover costs can be a far more profitable strategy than deadheading home because you held firm to your established freight rate.
- Monitor load boards: Load boards are a great resource – they are the most accessible and frequently used source of uncontracted freight. These convenient-to-use tools are real-time monitors of available freight, allowing trucking companies to select cargo to be picked up in a designated area bound for delivery within your home turf. Select load boards with supporting information and resources such as the number of days a freight carrier will have to wait to get paid, credit information, and links to funding solutions such as a freight factoring company.
Conclusion
There is no arguing about the extreme value of filling capacity with backhaul freight! Increased revenues and profits typically justify the efforts needed to overcome the challenges that hinder finding, acquiring, and moving those extra loads. Fronthauling may be the bulk of your business and the primary revenue driver, but filling the backhaul is equally essential. At most, it will add to profits – at least, it will be the guardian action to protect your bottom line. Carriers that focus effort and apply varying strategies to secure backhaul freight on return trips will benefit from increased operational efficiencies and higher profitability.
Key Takeaways
- Fronthauling may be the bulk of your business and the primary revenue driver, but securing backhaul freight to cover costs on the return journey is equally essential to ensure profitability.
- Intense competition for backhaul freight limits available opportunities. Trucking companies must establish alternate strategies to secure backhaul freight as much as possible for the return trip.
- The most successful trucking companies utilize several key approaches to accomplish this.
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