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What Is a Freight Embargo and Why Do Carriers Set Them?
Q What do LTL embargoes mean for shippers? A I f a carrier sets an embargo that a«ects a shipper’s freight, shippers must wait until the carrier’s embargo lifts or, more likely, they’ll look for other carriers in the meantime. Visibility between carriers and shippers remains crucial so all parties can reallocate resources for higher- value activities. Q Are freight embargoes always bad? A Not always—embargoes might seem counterintuitive for carriers, but they’re not arbitrary. Carriers often set embargoes on LTL freight to ease strain on their capacity. For example, when natural disasters disrupt the supply chain, car- riers often experience a spike in demand as shippers look for new ways to transport freight. If a carrier knows it doesn’t have the capacity to deliver that freight on time, the carrier might set an embargo on the freight a«ected by that natu- ral disaster. Carriers also set temporary service outages even when there’s no immediate disaster or sudden demand spike. Sometimes, they’re too busy to accept certain types of freight or freight from certain locations. Setting up a transit ser- vice alert for a certain length of time helps them catch up so they can predict their business, plan out capacity, and better serve their customer base more consistently. Carriers can communicate embargoes to ship- pers through CarrierConnect® XL with custom messaging that explains terms and reasons for the embargo and o«er alternatives, helping maintain symbiotic carrier/shipper relationships during an embargo. www.smc3.com/carrierconnect.htm
Embargoes are common in less-than-truckload (LTL) shipping. LTL temporary service outages are particularly relevant in today’s carrier market, when demand for freight is at record highs and resources are still lean for many carriers. Q What is an LTL freight embargo? A A freight embargo is when a carrier stops accepting loads from shippers. LTL embargoes can be set for a certain timeframe, geographic region, or even specific freight characteristics (i.e. maximum weight or shipment size) according to the carrier’s decision. Q Who decides when freight gets embargoed? A Embargoes are often set by carriers themselves. They can also be set by state and federal governments, but this is less common in American domestic freight. Q Why do carriers set freight embargoes? A An LTL carrier might set an embargo on freight during peak shipping season or in case of bad weather conditions, natural disasters, or limited access to certain locations. Embargoes can also help carriers maintain better control over capacity and lessen strain by selectively refusing freight for a set time . Q How long do freight embargoes last? A Embargoes can last days, weeks, or even months. For this reason, it is particularly important for carriers to have a solution that helps them communicate operational capabilities.
Brian Thompson Chief Commercial O¨cer SMC³ www.smc3.com
For more information on the SMC³ CarrierConnect® XL solution for carriers, visit smc3.com/carrierconnect.htm
30 Inbound Logistics • August 2022
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