The Rise of Dedicated Transportation

The Rise of Dedicated Transportation

Now, more than ever before, we have been experiencing a volatile market when it comes to getting goods delivered in a timely manner. From shutdowns caused by a pandemic to worker shortages and ports being backed up, it’s no surprise that shipping companies are turning to dedicated transport services. Keep reading to learn more about dedicated transportation so you can decide if it’s what your business needs.

What Is Dedicated Transportation?

Dedicated transportation is a contracted service agreement between carrier and shipper/broker that provides shipping solutions for businesses, ensuring goods arrive within a specific timeframe. Best of all, dedicated transportation offers competitive rates, and those rates are locked in for the lifetime of the contract.

In other words, dedicated transportation offers reliability and enables trucking companies to reduce maintenance and operational expenses while continuing to meet customer demands. With that said, dedicated transportation differs from renting, leasing, and other options for handling logistics. So, let’s dive into the benefits.

Why is Dedicated Transportation a Great Business Option?

In a time where prices are rising all around us, even shippers that have been accustomed to working with the ebb and flow of spot market rates are now turning to dedicated contract services. Why? Because with a contract, rates can be locked in for a period of three to five years, depending on contract terms.

Compare that to the following alternatives:

  • Renting trucks, which is typically a short-term solution that requires you to find drivers (along with potentially handling training and management).
  • Leasing trucks, which is a great mid-term solution that can save you money compared to rentals, but means you’ll need to invest in staff training, management, and often fleet maintenance.
  • Purchasing trucks, which can be expensive up-front and could cause problems if you have major breakdowns or not enough work to utilize your full fleet. Not to mention the cost of staff, maintenance, insurance, compliance, etc.

For many businesses turning to dedicated contracts, they’re considering all factors, including driver and equipment shortages and fluctuating freight demands. The question is, what can dedicated transportation offer your business beyond cost savings and simplification?

Benefits of Dedicated Transportation

There are several reasons why dedicated transportation is growing in popularity. If you think any of these benefits could help you streamline your operations and free up valuable time, dedicated transportation might be a service worth looking into.

#1 Reduces fleet management responsibilities

With dedicated transportation, you can enjoy the perks of a private fleet without the costs and hassle. Outsourcing rids you of the need to acquire trucks, hire and train drivers and administrative staff, and stay abreast of the legal and safety requirements involved.

With dedicated services, your equipment and transportation needs will be met without the headaches. This translates to streamlined processes, a simpler business, and fewer administrative and operational costs.

#2 Freight capacity is guaranteed

Dedicated transportation consists of a network of businesses, which translates into a reliable service for you. With dedicated transport, you can rest assured knowing that your recurring shipments will be delivered whenever and wherever needed, as per your contract.

With a dedicated contract, you’ll be guaranteed a set number of trucks and trailers, as well as a predefined cost and timeframe. That’s much better than dealing with last-minute no-shows and delays yourself.

#3 Customized shipping services

Dedicated transport services are equipped to handle a wide range of products, ranging from perishable and fragile items, to items that require special handling. It’s a solution that manages every aspect of transport large or small, including route scheduling and appointment loads, yard shuttle services, or making accommodations for a unique circumstance that requires specialized equipment.

With this in mind, dedicated transport works for shippers large, small, and everything in-between. Since you get to create a custom contract built specifically for your business’s needs, you won’t have to worry about paying for downtime because of a fleet that’s too big or stretching your fleet too thin with too much work.

#4 Consistent pricing

These contracted services allow shippers to pay more consistent rates, which is vital for staying within budget. The network of transportation and logistics companies working together are able to lock in lower rates because shipments and routes are typically more preplanned. Thus, along with backhaul assistance programs, empty miles are reduced, and those savings are passed on to contracted customers.

This consistent pricing is excellent for forecasting as well, and it’s something that’s hard to achieve when you’re dealing with leases, maintenance, and staff yourself.

#5 Improves customer service and reduces your liability

Dedicated transport means that your freight will move from point A to B without the driver making any other deliveries along the way. Since the driver is committed to transporting your freight, this reduces the risk of delays or an accident (i.e. liability), and it leads to better consistency and on-time deliveries.

In turn, all of these things help your business shine in the eyes of the customer. After all, reliability and speed are two top priorities in the world of logistics, and a service that misses the bar in either area is going to see its reputation suffer.

Determine If Dedicated Services Is Right for You

Perhaps you’re experiencing labor shortages or face growing demands for recurring shipments. Maybe you have specific equipment needs but are trying to cut costs. When you opt for dedicated transport, you’ll no longer need to worry about logistics.

To find out if dedicated services are the best outsourcing solution for you, it might be time to partner up with a trusted industry expert. At TCI, we specialize in dedicated services that could help your business maintain efficiency, even in these uncertain times. Reach out to us today to learn more.

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