Freight embargoes are not a new phenomenon in the U.S. logistics industry, but they have become more prominent in recent months, even as we make our way out of the closures and delays caused by the global impacts of COVID-19. Working through a freight embargo is rarely easy, as it requires LTL shippers to be nimble, flexible, and well-calculated in order to get their freight to its destination on time and on budget.
LTL shipping is complicated enough already and dealing with a freight embargo adds another variable to the equation. Find out everything you need to know about freight embargoes and how to navigate them successfully.
What are freight embargoes?
Freight embargoes are when carriers or carrier companies stop accepting freight loads based on a certain geographic region, or a specific product type. As a shipper, you will be unable to schedule a pickup or ship any products through affected carriers so long as the embargo remains in place. These embargoes can last days, weeks, or months, depending on the severity.
An additional effect of freight embargoes is increased freight rates. As capacity tightens, and the demand for carriers stays the same or increases, freight rates inevitably increase until the embargo is lifted (which is generally when capacity is no longer at or less than the number of loads that need to be transported).
Why do freight embargoes happen?
Freight embargoes generally happen when carriers are over capacity in certain markets and do not have the resources to accommodate the volume of freight that needs to be transported during a given time. These are not random, nor are they dictated by governmental agencies, as other embargoes are. Carriers will analyze their current freight volumes and evaluate how certain markets are impacting the overall operation of a carrier as a whole. As well as their ability to move freight in and out of certain markets. From there, they determine the best approach on what freight, if any, they can or cannot accept. All other loads will be denied in order to maximize their capacity and move as much freight as efficiently as possible.
Can freight embargoes be avoided?
Freight embargoes generally cannot be avoided, at least not by any actions taken by shippers and suppliers. These embargoes are a natural reaction to the logistics landscape and happen when there simply are not enough carriers and drivers on the road to meet the number of loads that need to be hauled. Everything from Hours of Service limitations and Electronic Logging Device (ELD) mandates, to driver, labor, and equipment shortages create limited capacity. Recently, many freight embargoes are the cause of continued impacts felt from COVID-19 that have persisted over the last year and the current state of the economy. Carriers are still working to catch up with the backlog of loads originating from domestic and international locations.
How to navigate freight embargoes
Freight embargoes can seriously throw a wrench in the supply chain of any business, stopping freight in its tracks until shippers can find a reliable and affordable carrier willing and able to take the shipment to its destination. Working through these embargoes involves carrier sourcing and selection, route planning, optimization of LTL, PTL, and full truckloads, all on top of many other precise calculations. That’s why it’s crucial to work with a third-party logistics provider, a partner who can help you get the carrier you need to haul your freight, when you need them.
3PLs like King Solutions can help you get through carrier embargoes by:
- Linking you up with a large network of carriers, helping you find ones that currently do not have an embargo in your freight’s origin or destination.
- Negotiate competitive rates to mitigate the impacts of embargoes on your logistics budget.
- Find the best method (LTL, PTL, TL) of shipping for your freight in order to get freight to its destination on time.
- Plan routes for your freight that incorporate available carriers.
- React to changing delivery times by helping you plan ahead and keep your shipment schedules on track.
When carriers are unavailable due to freight embargoes, it’s essential to find other resources as soon as possible. King partners with a large network of top-tier, reliable carriers. We leverage this network to find you an affordable and suitable replacement to haul your freight, wherever it needs to go. Ready to gain access to our network of carriers and “embargo proof” your supply chain? Get in touch with our team today.