Understanding Backload, Return Load & Empty Miles Problems
Table of Contents
Understanding Return Load
The $250 billion mammoth logistics business, often called the nation’s lifeblood sector, loses roughly $60 billion yearly owing to poor logistics efficiency and a fragmented market. The absence of innovative technological approaches to supply chain management is a major contributor. In India, it is more cost-effective to use labor than to invest in cutting-edge technology because of the country’s large excess of workers relative to its shortage of capital. Even with the high cost of shipping, service providers may easily be driven out of business by even the smallest pricing differences in their offerings.
Waste is a leading cause of price increases across all economic sectors. Yet the stakes are much bigger in the logistics sector. The logistics industry is particularly sensitive to waste since it increases the amount of fuel used, the amount of carbon dioxide released, and the number of time drivers spends sitting still. In logistics, wasted kilometers are the most common problem.
Empty truck trips are a frequent source of waste in the transportation business since they occur when drivers have nowhere to pick up cargo going in the same direction as their own. Empty miles, non-revenue miles, or deadhead miles are terms used in the logistics industry to describe these types of kilometers.
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What is Backload?
A backload is the cargo carried by a delivery vehicle on its way back to the depot. After delivering its cargo, a delivery truck is usually far from its starting point. The driver then has the option of returning empty, which is more expensive, or returning with a backload, which generates more income.
Previously, businesses would send their empty distribution vans back to the warehouse before sending them out on their next run. In the past, this practice was successful because businesses were willing to fork out money to compensate for the travel costs of an empty return trip.
Companies were under increasing pressure to lower distribution costs as consumers became more connected and knowledgeable. In order to solve this problem, businesses started stocking up on other items that could be transported in trucks. Therefore, backloading gained popularity as a means of differentiating one company from its rivals.
For example, if a truck delivers a load of goods from City A to City B, backloading would involve finding another load that needs to be transported from City B back to City A. By securing a backload, the truck can utilize its return trip effectively, generating additional revenue and reducing empty miles.
Backloading not only helps optimize resource utilization but also contributes to sustainability efforts by reducing fuel consumption and greenhouse gas emissions associated with empty trips. It is a valuable strategy for transportation companies to enhance operational efficiency, increase profitability, and promote a more sustainable transportation system.
Ways to Avoid Empty Miles
Continuous Move Planning
Stringing cargoes together to improve fleet utilization, counterbalance unproductive corridors, and make the most of driver time is an attractive proposition for carriers seeking steady traffic that may interest shippers. Carriers aggregate lanes among different customers and establish closed-loop routes to maintain constant freight movement by bundling lanes with low and high traffic together. Since the carrier is able to put the empty miles it has to use, the shipper saves money on each mile.
Because of its complexity, continuous move planning calls for both foresight and dependable implementation. Success requires the following from carriers:
- Keep track of shipper information and assess their routes on a regular basis.
- TMS (Transportation Management System) technology should be used for coordinated network management.
- Help shippers oversee the loading and unloading process to prevent penalties.
- Discuss HOS regulations with drivers and include their input in scheduling.
Also Read: Importance of Backload
Several options exist for reducing transportation waste via mergers and partnerships. The payload may be increased by combining partial loads via coordinated efforts, resulting in a reduction in the number of vehicles required to transport the same quantity of cargo. Consolidating shipments from many suppliers before sending them to warehouses or retailers is standard procedure in the produce industry. But the same argument may be made for retail shipping. Partial cargoes may be run to rival shops in the same region, despite the fact that merging freight might significantly save fuel use.
Improving cubic usage of cargo is another way to save mileage. For instance, retail packaged goods (RPCs) may be stacked without gaps to enhance load height, allowing for the use of fewer pallets in the delivery process. Redesigning packaging in various ways may also result in fewer unit loads and thus fewer vehicles on the road because of increased height or density of the loads. CHEP’s Solutions Portfolio includes services that guarantee optimal unit loads for its clients.
Implement just-in-time delivery practices that help synchronize shipments with production schedules or customer demand. By delivering goods precisely when they are needed, you can avoid unnecessary trips or returns.
Continuous Evaluation and Analysis
Regularly evaluate and analyze your transportation operations to identify areas of improvement. Track and measure empty miles, identify trends or patterns, and implement strategies to minimize them based on the data.
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