Memphis provides an outstanding variety of transportation options that makes it an ideal location for logistics operation. The city offers various efficient and flexible ways to move freight via the Four Rs in transportation — rail, runway, roads, and rivers. It extends its logistics to most of the East, West, Gulf Coast ports and even the world’s major market thoroughfare such as in the U.S. states, Mexico, Canada, and others. It is not surprising that Memphis is considered the ‘Aerotropolis’ and America’s ‘Distribution Center’ in freight hubs.

source url However, this far-reaching logistical capability and warehouse spaces found in Memphis market come with a price. The van rates in Memphis are recorded to be high compared to other logistic-centered areas in the state. microsoft office 2004 student and teacher edition mac In simple analysis, market rates that remain elevated especially in freight business are a symptom of imbalance. The instability between loads (demand) and trucks (capacity), say a shortage of trucks and/or an increase in freight availability just makes sense. Despite the available data and tools to find and analyze these imbalances and in turn predict rate trends with higher accuracy, the lane rates in Memphis are consistently high. What are the dynamics behind the high van rates in Memphis?

In order to understand why lane rates stay bloated in Memphis despite the unremarkable indicators like demand and capacity, it is important to understand the unique dynamics of its market.

Where Can I Buy Essays Online 1. Load-to-truck ratios

Load-to-truck ratio can be used as an indicator of capacity pressure. By taking the number of load posts and divide them by the number of truck posts, the load-to-truck ratio can be known on a local, regional, or national level. A study conducted from 2011-2014, the load-to-truck ratios in the Memphis market are found to be below the national average.

2. Outbound load volume

Another factor to consider is that the outbound load volume in the Memphis market is not extraordinarily high. In the same study conducted, the September volume recorded may be in tens of thousands yet the numbers are lower than the national average in the same period. Despite the 41% increase in load posts originating from Memphis, it remains low compared to Atlanta ports and other regional hubs.

3. Vulnerability under Hours of Service (HOS)

Another tool that can be used is the lane-by-lane analysis of load availability that originates in Memphis. Van rates can be affected by vulnerabilities created or brought about by 500-mile average length of haul. Analyzing these data, the seven of the top ten destinations are located within 500 miles of Memphis, which translated to a single day of driving prior July 2013. These destinations include Atlanta, Dallas, Houston, Oklahoma City, Cleveland, Kansas City, Chicago, Indianapolis, Lakeland, and Columbus. The changes in HOS increases costs as it pushes trips beyond the one-day limit. In addition, if the hauls is less than the 800-mile national average, the per-mile rates become more costly.

4. Imbalance of Outbound vs. inbound demand

Based on the earlier data on top city destinations, studies found that the ratio of outbound to inbound ratio of traffic demands is 2 to 10. Which means the outbound demands from Memphis is less than the inbound demands. For instance in April 2014, Oklahoma City recorded a 01% more demand for vans headed from Memphis to OKC than from OKC to Memphis. Despite the thousands of truck volume for outbound freight from Memphis, demand from Oklahoma City appears unremarkable.

5. Price of outbound lanes are above the national average

One of the reasons why the van rates exceed the usual level is because the outbound lanes are priced far over the national average. These rates are even predicted to go higher. With the seasonal pressures on outbound lanes, routes to prime destinations like Oklahoma City and Cleveland are expected to skyrocket above the normal national rates. Major contributing factors to consistent high rates are the unique market dynamics of Memphis freights: high demand of lanes and short length of haul.

As these above-normal lane rates inevitably come with Memphis as freight destinations, it is best to choose logistic service provider that offers speed, affordability, and customer support. Asani Global, LLC maintains its thrust in the logistic arena, ensuring limitless delivery options for individual goods and large quantities of cargo products alike.