ILMA Compoundings - June 2021 - 28

and that is probably a low number. It is probably closer to
the 9% to 12% range, " Adkins said. " Don't expect it to even
change through 2025. If you can lock in the 2021 rate and
have it good through 2023, that is probably a wise move on
your part. "
The cost of diesel and fuel surcharges is starting to trend
up again, Adkins said.
Hillard said loads that are last-minute or on strict delivery
schedules are seeing the greatest rate increases. " In some
cases, shippers were paying strong round-trip rates to ensure
that carriers do not care about deadheading somewhere to
get a load, " he said.
Overall, BRT's direct contract rates have not moved too
much recently, Hillard said. " Most of our shippers that
contract with us saw the writing on the wall six months
ago and renewed then, " he said. " We saw it as well but did
not move too much as we value those relationships and are
more concerned with what can be beneficial and profitable
for both of us, not what is necessarily going to maximize the
dollars in our pocket. "
Vieth said the increases could be problematic for shippers.
" What kills the shippers isn't the rate. It is the rate of the
rate increase, " he said, adding that the load turndown level
is currently at or near record levels. " That is indicative of
trucking companies having pricing power in the marketplace.
Everybody has to get their load moved. Ultimately,
the money is going to have to show up to move the load. "
Winter storm Uri in February added to capacity and
freight challenges. " The industry was already trying to get
back on track and had a tight equipment and driver market.
That created a complete backlog, " Adkins said. " We had
major carriers calling us and simply telling us they wouldn't
be picking up for a week or two weeks, and these are carriers
we have done business with for a very long time. "
Adkins added that some people couldn't get their product
moved no matter how much money they had. He has seen
an increase in expedited shipments, which is the most costly
shipping model, since the pandemic, and he isn't always able
to secure capacity. " I never had an issue if I was willing to pay
for it to get it there as quickly as DOT-regulated possible.
Now, I can't even always expedite the same day I load it, "
Adkins said. " People are using expedited to move everyday
shipments because it is shutting people down if they don't.
That has made a huge impact on the expedited market. "
To help ensure capacity, Adkins contracts in lanes that are
daily or weekly. " This allows the carrier some flexibility in
planning, securing equipment, utilizing backhauls and, in some
cases, dedicating equipment, " he said, adding that the company
also has dedicated bulk trailers and box vans. " We utilize this
concept in lanes that are within a 300- to 500-mile radius. "
28
JUNE 2021 | COMPOUNDINGS | ILMA.ORG
The dedicated equipment allows Idemitsu Lubricants to
top load in bulk shipments, reducing overall costs. " It also
allows us to preload shipments, creating flexibility both for
us internally and flexibility on pickup times for the carrier, "
Adkins said.
Hillard said it is critical for shippers to try to be the shipper
of choice. " Since carriers do have a lot of choices right
now, being a great shipper to work with definitely bumps
you up the list, " Hillard said, adding that carriers want
loading and pickups to go smoothly, with no wait. " We
appreciate quick and clear communication from shippers
to make sure that we quickly know if we do or don't have
a load, and any extra info that we might need to make sure
there are no surprises when we arrive. "
Adkins said he tries to build strong relationships. " Our
company has always placed a high value on our relationships.
I believe the carrier base becomes as important as our
customer base, " he said. " When you have a solid relationship,
it allows you to have the difficult conversations we're
all involved in today. "
THE RAIL MARKET
Adkins said he has experienced some locations where rail
was delayed, but it hasn't been a significant issue. " Currently,
we have seen a minimal impact to rail. However, with the
increase in pressure on the trucking market, I expect to see
an increase in rail shipments through the U.S., which will
drive higher cost and capacity in the rail market, " he said.
Chris Ashman, director of leasing and marketing for
TCIX Rail, said customers have had a skeptical optimism,
waiting to see how the market would play out postCOVID-19
and the presidential election. " Now that the
dust is starting to settle, demand is starting to increase and
will continue to do so, " he said.
With the increase in consumer demand, the need for railcars
will increase as well, making the availability for specific tank
cars tighter. Ashman said that even though all tank car sizes
from 16,000 gallons to 31,800 gallons are in high demand,
most of the demand is for an exterior coiled, insulated and
lined DOT117J tank car. " It not only meets the safety requirements
from the [Association of American Railroads], it is also a
very versatile tank car due to its size, " he said.
" Currently, we are extremely busy, and most of the cars we
had in storage are starting to move into long-term projects, "
he said. " Though it will be good for all markets, if you need
railcars in the foreseeable future, it would be best to lock in
now with the current discounted rates, as they will not be here
for long at the rate at which we are seeing assets move. "
Long is a freelance writer and journalist. She can be reached at
925-750-7163 or mindy@mindylong.com.
http://www.ILMA.ORG
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