Unexpected Weather Events are on the Rise. Is it Freight Embargo Panic Time?
Authored by SMC³ on October 11, 2022
As weather-related events become more common, what are the chances that freight embargoes could disrupt a somewhat upbeat outlook? There’s always a chance that a carrier will set a freight embargo, even in relatively normal years. Freight embargoes are common in less than truckload (LTL) shipping and shippers have always had to navigate around them.
In addition to large scale weather-related events, there’s a host of reasons why a carrier would set a freight embargo. They are often necessary for carriers to comply with legal restrictions and overcome logistical challenges. Unexpected seasonal weather events can occur—hurricanes, flooding, blizzards and other natural disasters. Even road closures and an uptick in seasonal demand can lead to a sudden freight embargo. LTL temporary service outages are particularly common in today’s carrier market where resources are still lean for many carriers.
Let’s also not forget that there’s still a shortage of labor due to many truck drivers aging out of the workforce. While some LTL carriers have increased driver compensation and bolstered training programs to attract new drivers, we’re not quite back to full steam. Then, there’s the ongoing chassis shortage that is predicted to persist until 2024, according to the Journal of Commerce (JOC). All of this could lead to freight embargoes during the 2022 peak season.
The Impact of Freight Embargoes on Shippers
A freight embargo means a carrier is no longer accepting loads. If a carrier’s capacity gets too tight, a freight embargo is likely imminent. Embargoes help carriers reduce the strain on their network. Shippers have two choices when an embargo is set. They can decide to wait until the embargo is lifted, but this can be off-putting to consumers if they wait longer than expected for their holiday orders to arrive.
A shipper might try to look for a different carrier to move their freight during an embargo from another carrier. But, as previously stated, capacity could be tight and an alternative carrier isn’t guaranteed. Plus, traditional modes of communication between carriers and shippers via phone calls or broad email distributions often delay the process.
Freight Embargoes Can Be a Good Thing—for Carriers
It seems counterintuitive that a carrier would risk losing revenue by setting a freight embargo. But embargoes are not arbitrary, and they are typically set to ease the strain on their capacity and network.
Weather events often lead to freight embargoes because a carrier doesn’t want to risk delayed deliveries—and a negative impact on their reputation. Even with no immediate natural disaster or demand spike, carriers may decide that a freight embargo can help them catch up if they’re too busy at certain locations. This gives the carrier time to plan their capacity and deliver consistent customer service once the embargo is lifted.
How to Better Navigate Freight Embargoes
When setting service interruptions, communication is critical. Shippers and carriers alike benefit from clear, early, consistent communication of information that affects their freight. Visibility between carriers and shippers remains crucial so that all parties can reallocate resources. Additionally, proactive alerts direct from the carrier or via TMS can help avoid the challenges that come with freight embargoes.
With SMC³ CarrierConnect® XL, carriers and shippers have access to the most accurate, comprehensive, up-to-date LTL transit data available. These real-time transit service alerts help carriers better manage embargoes and custom messaging for shippers at the terminal, city or postal code level. This technology empowers carriers to adjust pickup dates and calculate estimated delivery dates based on optional embargo data.
LTL carrier embargoes can last days, weeks or even months, depending on the carrier’s decision. For this reason, it is particularly important for carriers to have a solution that helps them communicate operational capabilities. The SMC³ CarrierConnect® XL technology enables custom messaging that explains the terms and reasons for the embargo and offers alternatives. This helps maintain the symbiotic carrier/shipper relationship during an embargo. It provides visibility unexpected or weather-related lane impacts that shippers can use to plan their shipments.
Be Prepared, Don’t Panic
So no, it’s not time to panic about seasonal weather-related freight embargoes. Don’t let LTL carrier embargoes become a crisis during unforeseen weather or other operational issues. Rely on SMC³ CarrierConnect® XL’s transit service alerts to navigate and communicate freight embargoes to preserve shipper/carrier relationships and help keep shipments moving.
For more information on the SMC³ CarrierConnect®XL solution, click here.