What does backhaul mean in logistics?
A backhaul in trucking and logistics refers to the return trip of a commercial truck that is transporting freight back over all or part of the same route it took to get to its current location. The freight brokers and the motor carriers are both heavily reliant on each other when it comes to backhauls. In the trucking industry, backhauls are also known as deadheads. It is where sales can command the highest rates for haul and the customer connection is the best.
When trucks are booked to deliver products and materials, the arrangement is usually for a one-way journey. The logistics company can’t even really charge for the backhauling journey, otherwise, they’ll lose out on business to their competitors.
If the truck returns to the base while running on empty miles without carrying any goods, it ends up wasting fuel, time, and money. That’s why logistics companies prefer to set things up in such a way that the truck is carrying some amount of goods over part or all of the trucks journey back to the base.
Backhauling is all about planning for roundtrip hauls, mapping out routes to make sure that goods are transported on every leg of a truck’s journey. This increases efficiency by boosting vehicle and driver utilization and gets rid of the need for additional trips. This even helps cut down on the unnecessary usage of fuel, saving your money and reducing your carbon footprint and environmental impact. Backhauling makes it possible for carriers to transport a full load, partial truckload, or less than truckload by going back down the exact same route.
It just does not sense economically for a carrier to go for an empty backhaul. It would always be more beneficial to take advantage of this practice and carry another truckload on the way back.
Backhaul is used quite often in several types of companies, particularly centralized distribution companies such as beverages, household items, and those who use some kind of a waste to incorporate back into their process and obtain a benefit.
The whole premise of the process is really simple - after the goods are delivered, while traveling back to the point of origin, the truck stops at those companies that have to return merchandise, products or packaging to the point of return. Essentially, one company's point of origin could be another company's wasteland in terms of relationships and sales coverage.
In warehousing, backhauls could also be the truckloads of goods that were returned by customers or the goods for which the customers have requested an exchange. An incoming backhaul will usually need to be inspected for damage and then be approved for quality before it is restocked.
The whole point of backhauling is to help logistics companies maximize their resource utilization by turning empty miles into revenue-generating miles.
In addition to carrying their own product and waste, companies might even decide to fill their vehicles with loads belonging to other companies to reap cost savings and other benefits.
Today, logistics companies are even making use of telematics and the Internet of Things (IoT) so that they can get deeper insights and customize their routes for backhaul scheduling with greater efficiency.
What are the benefits of backhaul management?
When you’re managing your backhauls well, you make sure that your trucks are not just traveling empty miles on their way back to the base but are turning them into revenue generating miles. It essentially helps you gain some sort of value out of the return journey to the point of origin.
Improved fleet management
When you’re managing a fleet, you don’t want your trucks driving back empty after making a delivery and just having the driver and the truck come back to the base without bringing or delivering any other goods along the way. If they could pick up a load of goods that need to be brought back to the base or delivered to another location along the way, that would be a much better use of your resources.
Effective backhaul management helps you plan your routes well so that your trucks aren’t empty on their way back to the base and you can maximize your productivity on the road.
Planning your routes and loads efficiently helps reduce the wastage of fuel spent driving empty miles, thus reducing your costs substantially. It also reduces the need for additional trips for deliveries which could be carried out during the backhaul journey, which reduces your logistics company’s costs even further.
Reduced environmental impact
The reduction in fuel spent driving empty miles and the elimination of the need for extra trips to make deliveries that would now be handled during the backhauling journey help you minimize your fuel wastage, reduce your carbon footprint, and lower the environmental impact of your operations.
Increased customer satisfaction
Better backhaul management helps your logistics company predict ETAs with greater accuracy and helps your drivers and delivery agents make more on-time-deliveries, thus increasing your level of customer satisfaction substantially.
What is the difference between internal and external backhaul?
Internal backhauling is all about the company moving its own goods or products on a return trip. For example, a company that sells ground coffee might send a truckload of roasted and ground coffee to a store and pick up coffee beans on the way back to bring it to the factory.
External backhauling is when the company transports third-party freight to and from the original delivery point. For external backhauling, it is important to communicate regularly with other carriers who operate in the same lanes and with brokers, who schedule with other carriers to plan the moving of goods before dispatching and delivery. Most fleets who engage in external backhauling are for-hire transportation companies. But recently, private fleets have also started engaging in this practice to reduce their operating costs and increase their revenue.