When it comes to freight costs, business owners must always find ways to cut costs. This is common across the eCommerce landscape. By reducing the cost of your freight transportation, you can have a bigger budget to invest in other areas of your company or simply save up.
Employing trucks to move goods around is a prevalent method of transportation. The trucking market is significant, as the industry moves about 72.5% of America’s freight by weight. The number of trips a truck can carry and how effectively it is used will determine its potential to earn a profit. It’s critical for truckers and trucking businesses to manage trips as efficiently as possible. Maintaining a fleet of trucks requires a significant initial investment and continuous expenses.
Fuel, leasing payments, driver salaries, and repair and maintenance costs are the biggest expenses for trucking companies. Enter backhaul trucking. It’s a method where a truck picks up extra cargo after an order is finished and delivers it back to the truck’s original starting place. By maximizing productivity on the road, backhaul trucking essentially entails carefully designing routes to prevent trucks from being empty on return journeys.
Understanding Backhaul Trucking
Backhaul trucking, often known as backloading, is when a vehicle makes a return trip carrying commercial items rather than returning empty. A truck picks up and transports a second commercial load on the trip back to its originating point after delivering its initial cargo.
Doing this reduces the truck’s overall operating costs as added cargo on the backhaul has been arranged. This is the reverse of deadheading, a situation in which the truck makes a return trip without carrying any loads.
The distance that trucks travel without cargo on their return trip after their initial delivery adds to their overall fuel expenses.
American Transport Research Institute (ATRI) reported that 20.7% of the 9.4 billion miles driven by licensed trucking businesses were empty. Fleets spent $3.3 billion driving empty trucks, or $1.69 every mile. These “idle miles” waste fuel, raise prices and reduce overall efficiency.
To illustrate backhaul trucking, let’s suppose your eCommerce business is moving a fresh batch of items for sale. You request that a trucking company bring your goods from your warehouse to the distribution center.
After the truck successfully delivers your products, you receive a notice from the distribution center that you have several items up for return. As these goods are already in the same location. You then ask that the truck bring these returned products to your warehouse for the return trip. The trucking company can backhaul cargo since it can transport another commercial load back to its point of origin.
There are two known types of backhauling: internal and external. Internal backhauling refers to the return of a company’s products or supplies. For example, a small bakeshop can deliver their goods to a grocery store, then pick up ingredients like milk and eggs near the shop to take back to their bakery.
However, most fleets engage in external backhauling, which involves delivering and picking up freight from outside sources. It requires constant communication with other carriers who operate on the same routes. Brokers who book appointments with other carriers coordinate the movement of products before dispatch and delivery. The majority of fleets that backhaul externally are for-hire transportation firms. It is not uncommon to see more private fleets as they are seen to boost profits and cut costs.
The Benefits of Backhaul Trucking
A solid backhaul strategy will help you generate money when transporting backhaul goods. Backhauling helps you increase your bottom line by reducing costs and boosting productivity.
While backhauling needs more planning than dispatching trucks, the advantages stack up. Effective loads reduce fuel waste, lowering costs and lessening environmental harm.
1. Increased Efficiency
Load planning can optimize truck usage to maximize delivery capacity. It also helps backhauling increase overall efficiency. Enabling companies to make more of their services available to clients also raises the standard of service.
It just takes one truck with a backhaul route instead of two trucks for two separate trips. As a result, dispatchers don’t need to keep an eye on trucks as much as they’re transporting cargo on outbound and incoming trips. The operator can carry more freight as a result of maximizing fleet utilization.
2. Sustainable and Environmentally Friendly
Over 70% of consumers’ shopping decisions are influenced by sustainability. Businesses that transport goods should enhance their overall sustainability to attract clients. Particular focus should be given to the transportation and trucking sector, as it accounts for 14% of global greenhouse gas emissions.
Backhauling is one of the most effective green logistics techniques for making your company ecologically friendly. This is because backhauling shortens the time empty vehicles are on the road, reducing greenhouse gas emissions.
3. Maximized Profits
Moving cargo via backhauling maximizes a trucker’s or a trucking company’s chance of making a profit. This is possible because they can bill for two trips rather than just one. To put things in perspective, a backhaul journey typically costs between 70% and 100% more than a standard trip.
Loading and transportation are more productive when backhauling. This results in scheduling only the necessary number of workers, lowering labor expenses. Utilizing your trucks more effectively through backhauling will lower wear and tear, thereby increasing their lifespan.
Looking Out for Backhaul Trucking Opportunities
Shippers and freight companies must find innovative ways to reduce the time, fuel, and cost incurred. This is especially true when shipping long distances in an environmentally conscious world. Innovative routing solutions are an excellent way of making data-driven decisions.
1. Load Boards
It’s good to communicate with other carriers and can lead to some backhaul opportunities. But engaging with a broker is frequently a better strategy for success. Using a digital load board is even better. Load boards are online markets that link shippers, brokers, and carriers to quickly and effectively move goods across your area quickly and effectively.
The locations of the carriers’ trucks and their intended destinations are known. The cargoes that the shipper needs to be hauled are listed. Between shippers and carriers, brokers serve as matchmakers. A load board offers the equipment and technology required by the three parties.
2. Route Planning
Large fleet trucking companies may easily plan and arrange transport orders using route planning software. Most route planning tools available today offer backhaul alternatives and can estimate cost reductions.
Examining historical data and forecast future patterns makes these planning and optimization tools excellent for locating backhaul routes. Truck loads are often prioritized based on factors like urgency, cargo type, distance, and efficiency.
3. Using Analytics
To maximize the effectiveness of your fleet, make better-informed judgments about where to allocate resources. You can monitor fuel prices, driver turnover rates, equipment maintenance requirements, and truck and vehicle utilization rates. All of these contribute to a smoother flow of business operation.
Additionally, intelligent data use can lower the incidence of deadheading and increase the profitability of the entire supply chain. Even your current clientele can be used to generate interest in backhaul transportation. Use data to examine routes and forecast delivery trends. You might have many consumers spread across different places. Trucking businesses with bigger fleets can use this data to schedule backloads based on transport orders from numerous clients.
Orders should be optimized for delivery locations if the shipper has a fleet. Data analysis and route planning tools may also be useful in planning backhauls.
Additionally, shippers with numerous locations should backhaul as much as possible. Having a dedicated team that organizes cargo flows is also recommended.
Independent truckers should collaborate closely with cargo owners and trucking companies. Being a part of a network of service providers and forming business contacts may provide more opportunities. To ensure backhaul chances when carrying freight, preparation is essential.
It’s important to consider the financial implications and possible savings that a backhaul strategy could produce. This benefits both small and independent operators to owners of massive trucker fleets.
Different cost factors have a significant role in the overall profitability of running one or more trucks. This includes auto insurance, fuel expenses, driver wages, truck maintenance, and legal permits. The more trips a truck takes, the more money it makes. This helps mitigate the cost factors mentioned above. Suppose you have a truck that uses approximately 64,000 liters of fuel per year if it travels 160,000 kilometers at 40l/100km. At the current $1.32 per liter diesel price, the annual fuel expense for that truck is close to $85,000. You might save more than $40,000 annually if you agreed to accept backhauls for even half of those miles.
eCommerce merchants should consider backhaul trucking. You’ll get more use out of their vehicles while lowering costs and boosting efficiency. With dynamic routing, real-time freight data, and strategic KPIs, deadheading within a freight network can be eliminated.