What is Backloading?

Within the transport industry, backloading is a dirty word. 

Road Transport works on the basis of supply and demand.  The more demand for a service, the higher the rate.  Of course the opposite also applies so the less freight available, the increased competition for that freight drives the rate down.  The backloading term is used to describe the cheapest leg of the journey when carriers are more likely to negotiate their rates to gain the work.

Of course there is a limit to how low a carrier will go - and that is based on the overall revenue gained from the 'trip' the vehicle completes.  For example, using full loads as our benchmark, let's assume you wanted to move a full B Double load from Sydney to Brisbane.  Becuase there are substantial freight volumes in Sydney travelling to Brisbane, carriers are in a position to choose the freight they carry and set a reasonable rate (to a certain extent).

So you may end up paying anywhere from $2500 to $3000 per load.  In this example, let's use the distance of 1000km as a benchmark.  Let's also say the gross revenue you want from your vehicle is $2.00 per km.  Now the operator receiving $3000 to go from Sydney to Brisbane needs to receive $1000 for the return leg in order to average $2 per km for the round trip.

However, the operator that travelled to Brisbane for $2500 needs a return of $1500 to receive the same revenue per km.  While $500 is only 12.5% of the overall required revenue, it is a 50% increase on the revenue the first carrier needs to receive.

Hopefully you can see why some carriers can make the Brisbane-Sydney journey at a reduced cost compared to others.  That's why it is called a 'backloading' leg.

One issue you also need to keep in mind is that to comply with the various laws and regulations, carriers have to spend money.  Those that do everything 'by the book' will invariably be more expensive to use that the small carriers that do not instigate the huge number of compliance regulations.

With this in mind, you, as the consignor and/or consignee, also have a number of responsibilities in relation to chain of responsibility legislation and fatigue management.  More on this later, but suffice to say that if you make a demand on a carrier that is likely to compromise fatigue management laws, and that driver is involved in an accident, you may be held to account.