Summer may bring a slower pace for some, but the rail freight industry is picking up steam, continuing the momentum of the first quarter of 2017. U.S. rail freight traffic continues its growth for a fourth straight month over 2016 carload numbers. The Association of American Railroads (AAR) reports an 8.4% increase in rail traffic in May, compared to the same time last year. AAR Senior VP John Gray reports in a press release that “Thirteen of the 20 commodity categories we track had higher carloads in May 2017 than in May 2016, including the four biggest categories – coal, chemicals, crushed stone and sand, and grain.”
The growth of e-commerce is driving the convergence of retail and distribution space. As e-commerce gains market share from brick and mortar stores, it is also increasing the demand for last-mile delivery service and public access pickup locations. Existing malls and shopping centers may provide a solution to more efficiently move goods to consumers, perhaps offering retail, pickup and delivery services from the same facility. As such, communities and zoning officials will face the opportunity to consider utilizing older and underutilized retail spaces to meet this demand, and real estate owners will likely work to find ways to make mixed-use retail/distribution sites acceptable to local residents.
AMTR has helped recover hundreds of thousands of dollars for shippers, even when the bills have been correct! Many shippers know the difficulty of dealing with multiple railroad carriers for a single shipment; either each railroad is paid separately, or one carrier is paid for the full interline move and is responsible for distributing the money to the other railroads involved. Shippers can benefit from either type of invoicing, depending on the lanes, negotiated pricing and volume.
AMTR has extensive knowledge of all the legalities and carrier-specific rules governing these movement types. We also maintain direct relations with all the major railroads to ensure our clients pay the lowest rates. There are many occasions when separate freight bills, which are governed by private pricing, might be preferable over a published through rate. Likewise, an interline rate paid to one carrier might turn out to be less expensive than separate invoices. AMTR has been successful in having carriers issue corrections to invoices or having them cancelled altogether. When it comes to these issues, just because the invoice is correct, does not mean the shipper paid the lowest possible amount on the full shipment.
At AMTR, auditing is more than just rubber-stamping bills. We look for the lowest rates, even when everything checks out on the bills. We will review the movement as a whole and we will not stop until we are certain there are no additional savings available.
This is the time of year to keep it cool, including shipments of heat-sensitive products. Shippers are hiring refrigerated trailers (reefers) or requesting temperature control services from LTL carriers in order to protect their products during transit. However, these specialized trailers come at a price, and carrier accessorial costs are steadily rising. According to DAT.com, spot market reefer rates climbed 8¢ from April to May, making the new average $2.02 per mile–13¢ higher than this time last year.
Shippers, keep your cool and your shipments protected by being proactive. Become familiar with your products’ unique characteristics and needs. Annotate bills of lading with any specific requests for temperature protection. Also, be aware of a carrier’s specific rules regarding requesting special temperature protection services. The rules provided by the carrier will likely be very specific, as the carrier desires to be fully informed of a shipper’s needs and to be protected from any damage liability. Be sure to follow any directions completely as prescribed.
Do not just protect your temperature-sensitive products, protect yourself from inaccurate freight billing charges with an After-Payment Freight Audit from AMTR!
At AMTR, the core of our business model rests on human knowledge. In addition to our in-depth proficiency with our customers’ freight operations, we also pride ourselves in the recognition of current industry “hot” topics. Whether it is industry happenings, announcements or trends, it is our job to stay on top of it and, moreover, to understand and apply it to benefit our customers where possible. Some examples follow:
-The acquisitions of short lines by Class I carriers, in addition to truck mergers, are likely to generate changes to rates and/or rules. We are always on the lookout for how such changes affect not only our clients’ current costs, but also accounts payable processes. When carriers are added, deleted or altered, duplication can become a problem during the transition phase.
-As subscribers to all carrier rules tariffs and support publications (such as RAILINC and the NMFC), we are in a unique position to help clients when they cannot program such verbiage or logic into their rate systems. We also find any application errors in freight invoicing regarding these changes after they become effective.
If your company lacks the time to focus on new industry knowledge, and especially to take advantage of it regarding improving freight processes and reducing freight costs, then it is time to call AMTR. Let us do the knowledge work, so you can reap the freight savings.
