Understanding traffic lanes in America today is the most important aspect that every new freight broker agent or new owner operator must conquer. The movement of freight within the United States is determined by the shipping lanes or traffic lane and this is the basis of the cost of shipping products and what loads pay the trucking company who moves the loads within the lane. Moving freight from one state to another on approved interstates, highways, and other DOT approved roads is called a traffic lane or shipping lane. The direction of where the freight is going, the ease of its drop off location, and the availability of freight to be picked up greatly determines the value of pay to the carrier within the lane. Trucking companies are always looking to see if a load is available after the initial load has been delivered. This is what draws the influence of multiple carriers within certain regions and this generates the value of the lanes and what lanes will pay truck carriers who want to deliver in the specified areas.
Another factor to consider is the dead head. You will hear this daily across the freight movement cycle and it can be confusing. Many freight brokers and owner operators consider dead head to be the make it or break point. Carriers do not want to waste valuable time and fuel cost getting to the next load. True freight brokers are a master of keeping dead head down. A good traffic lane has less dead head values since the freight is more available which makes getting a load easier. Freight in Texas is a good example. Dead head is considered the last load a trucking company delivers and the distance between the next load pick up. Keeping dead head miles under 100 miles is critical since the HOS (Hours of Service) is playing into how much time the carrier is allowed for pick up and deliverer before there reset is mandatory.
Every new freight broker agent and new owner operator must decide what traffic lanes are best available around them and from there they can begin to start building their logistical business. Freight brokers must communicate to carriers and understanding where they want to move loads and what regions they are comfortable in is critical in your freight dispatching business. Freight agents and brokers must remember to listen to the carrier’s needs since without the carrier you cannot move the loads.
Traffic lanes affect the cost of freight movement for several key factors and below are the top 2 key factors explained. Knowing the freight cost is important and knowing what determines the cost will help you better understand the rates to move freight.
2 Key factors to consider when choosing a traffic lane and how the rates are affected:
1.State Locations Regulations and Highway Systems
When carriers are delivering freight, a key factor is where the lane is located. Driving thru the Rocky Mountains will definitely cost more than the flat interstates of Texas. Going into Florida which is considered land locked and no way out but from the way you came in is another example. The location and terrain greatly affect the traffic lane when carriers base their fuel at 5 miles to a gallon. Also each states have IFTA rules and toll fees according to their own state highway laws. The more tolls a trucking company must pass thru, the more they will need in rates.
Carriers will look at the drop off location and how far it is off a good paying traffic lane or Interstate. If a carrier needs to drive an additional 25 miles one way thru a few small towns then again this is going to affect the rate. All carriers are looking for a way to deliver with ease and pick up with ease. Being knowledgeable in these states is where the freight broker agent can provide a service that can be attracting and appealing to all carriers. Congested highways, multiple toll fees, and bad drop off locations will determine to carriers if its worth it or not. Overcome these issues with knowledge and it’s a win situation for all parties.
2. Availability of Freight
Freight lane prices are determined by the amount of loads each state has available divided by the number of carriers available to move the loads. A good example would be Florida. Taking a load into Florida usually pays more than other states, since the number of loads coming out are fewer. So, when coming out of Florida it pays less since there are more carriers within Florida than loads available. Making it a shipper’s market on coming out with cheaper rates and a carrier’s market going in. Another State for example is Texas. Freight coming out of Texas usually pays well since the abundance of loads are pretty much everywhere. So, there’s more loads than available carriers and a trucking company can usually grab a descent paying load going out. The coin flips the other way going into Texas. Freight normally pays average going in since the abundance of freight going out. The cycle continues per each state and every freight broker and owner operator must adapt to learning these states individually by learning the freight markets.
There are many factors involving traffic lanes and it always best to work with a broker who is knowledgeable. Finding such a broker is few and far between and for this reason, many owner operators have a hard time understanding and overcoming the traffic lane confusion. Taking into consideration the key points mentioned above, other points to consider is the Weather and time of year, seasons do affect shipping and for every new season, different industries begin to have different available freight.
For more information on how to overcome traffic lanes. One brokerage to mention who have mastered the dispatch of freight and traffic lanes is LFS Logistics. We recommend any new or seasoned owner operator who is wanting to grow better lanes, by contacting LFS Logistics and joining their dispatch program. They can keep any owner operator moving with less dead head, and strategically dispatching trucks into the higher paying lanes. These types of services greatly affect the line haul revenue each week by a $1000.00 or more. So, it’s very important to work with professionals who have mastered the trade of freight lanes and dispatch. When you begin to start a new career as a freight broker or trucking company, or if you have been in the logistics freight moving industry for a while, knowing your traffic lanes and how to utilize them is going to make all the difference within your profit margins associated with your logistics business.