There’s no shortage of challenges in today’s logistics landscape. Transportation costs are high, the market is flooded with inexperienced and inconsistent providers, and customers are demanding faster delivery of a higher volume of product than ever before.
For many, these pressures have sparked a re-evaluation of their logistics strategies, with dedicated transportation emerging as a compelling alternative to traditional over-the-road (OTR) shipping.
While the dedicated model offers significant advantages, such as improved reliability, operational control, and cost predictability, it’s not a one-size-fits-all solution. So how do you know if it’s right for your company?
Anderson Trucking Service (ATS) has 70 years of experience providing a variety of transportation solutions tailored to customers’ unique needs, including dedicated transportation services. We’ve helped countless shippers decide if dedicated transportation is the right move for their business, and we’re happy to do the same for you.
In this article, we’ll explore the key considerations shippers need to evaluate when determining whether dedicated transportation is a good fit for their operations.
You’ll walk away with 27 questions to use as a comprehensive rubric for your own decision-making process, plus a clear understanding of the benefits and potential drawbacks of the dedicated transportation service model. Let’s dive in!
- Dedicated transportation definition
- What to consider before transitioning to dedicated transportation
Dedicated Transportation: Definition and Benefits
Unlike traditional over-the-road (OTR) transportation services, in which shippers all vie for capacity from the same pool of trucks, dedicated transportation affords shippers the exclusive use of a portion of a carrier’s fleet for a set period.
The distinguishing features of dedicated transportation include this “dedicated” fleet segment, contracted drivers, and scheduling tailored to the shipper’s needs.
Dedicated transportation services can be a good fit for high-volume shippers in virtually any industry, though it is most heavily relied upon in the retail, manufacturing, pharmaceutical, and automotive industries.
Shippers within these market segments can often benefit from the reliability, customization, and operational control of a private fleet, but may not have the internal resources or structure to invest in one (or any interest in managing one themselves!).
If that sounds like your business, you certainly wouldn’t be the first decision-maker to consider dedicated transportation as an alternative to OTR shipping.
Many who do make the switch find there are ample benefits beyond guaranteed capacity and cost efficiencies. But there are also downsides and disadvantages, particularly if the shipper’s business isn’t a good fit for dedicated service.
What to Consider Before Transitioning to Dedicated Transportation
Before beginning any kind of dedicated provider vetting process, shippers should first evaluate whether their business is a strong fit for dedicated transportation.
A thorough self-assessment can help ensure that a company’s shipping needs and operational processes align with a dedicated fleet's service model and fixed costs.
By clarifying these requirements upfront, shippers can save time, avoid costly misalignments, and focus on finding a carrier that complements their logistics strategy.
So, without further ado, here are our top four things to consider before you make the switch to dedicated transportation services.
Freight Volumes and Consistency
Outbound freight volumes are the single most important factor in determining whether dedicated transportation may be a good fit for your business.
For a dedicated arrangement to be worthwhile for both parties, the shipper must provide the carrier with consistent freight on a predictable basis.
Each carrier will have its own minimum volume threshold at which shippers qualify for dedicated service — at ATS, it’s five trucks per day, five days a week — so dedicated service is unlikely to be a feasible solution for low-volume or sporadic shippers.
As you review your business’s freight volumes, remember that this is a two-part question:
- Do you have high-volume shipping needs, i.e. multiple trucks moving five or more days per week?
- Are your freight volumes consistently that high? If not, are the fluctuations predictable and/or negligible?
Consistency is critical to the success of a dedicated freight contract, as a sudden drop in volume could result in a pricing adjustment.
The fewer trucks you require, the higher your costs will be, so it’s important to be 100 percent confident in the consistency of your volumes before entering a dedicated contract that depends upon them.
Routes and Geography
Regular, repetitive routes are the backbone of an efficient dedicated transportation arrangement.
One of the most important questions to ask yourself before pursuing dedicated transportation is simply: Are your delivery routes repetitive and predictable?
In an ideal dedicated scenario, the shipper would have consistent daily volumes out of a single origin point traveling regularly to a handful of delivery locations within a short-mile radius (250 miles or less).
This is a desirable situation for everyone involved. Why? For shippers, consistent delivery patterns allow for the optimization of routes for more cost-effective operations, reducing fuel consumption and transit times.
Predictable routes also simplify fleet management for carriers, as they enable maximum vehicle utilization, precise maintenance schedules, and efficient driver allocation, all of which help to keep costs in check.
Speaking of drivers, those assigned to dedicated routes enjoy a stable, predictable schedule while gaining valuable familiarity with delivery locations and procedures.
This contributes to more seamless pick-up and delivery processes, boosting service reliability and safety while minimizing errors.
With all that said, your lanes don’t necessarily need to be simple and straightforward to be a good fit for dedicated service.
In many cases, dedicated transportation services can solve difficult lane situations requiring customization, such as special equipment needs or high-touch freight.
These needs can be difficult for contract carriers to meet reliably. Dedicated transportation affords both the shipper and the carrier the resources necessary to create a long-term custom solution for tricky lanes.
Finally, consider the per-shipment miles on your regular lanes. While there’s no hard-and-fast rule across the industry, carriers generally tend to prioritize shorter-mile dedicated routes.
But that doesn’t mean your longer-haul lanes are out of luck.
If your business’s delivery routes exceed 400 miles per shipment, you’ll want to look for a dedicated transportation partner that specializes in long-haul dedicated services. They’ll be better equipped to help you navigate the specific nuances of those shipments.
Regardless of the mileage or complexity of your routes, carriers are most likely to be interested in your dedicated freight if it provides their trucks and drivers regular, repetitive lanes — and the operational benefits therein.
Attempting to apply the dedicated transportation service model to an ever-changing slate of delivery locations fundamentally undermines these benefits, leading to unreliable service and a poor experience for both parties.
Budget and Financial Goals
The cost efficiencies made possible by a successful dedicated transportation arrangement are understandably intriguing to shippers, but evaluating whether your business can support the fixed costs is crucial before making the switch.
A dedicated transportation contract outlines a fixed rate for the agreed-upon service level, i.e. a certain number of trucks and drivers dedicated to moving a certain amount of loads per period.
This gives shippers the advantage of knowing exactly what their transportation costs will be months or even years in advance.
The predictability of these costs can drive more efficient budget use and greater profitability in the long term. But supporting these fixed costs requires a consistent financial commitment — which is why it’s important to honestly answer the question “Can my business support the fixed costs?”
To help you begin your evaluation, here are some additional questions to ask of your business:
- Does your freight volume remain consistent enough to justify the investment?
- Are you experiencing cost volatility with spot-market rates that a fixed-cost model could stabilize?
- Do you have the budget to absorb upfront expenses, such as specialized equipment or branded trucks?
- Can your margins support these costs while delivering reliable service to your customers?
Answering these questions can help ensure that a move to dedicated transportation aligns with your operational needs and financial goals.
Partnership Evaluation
Finally, it’s important to take a step back from the nitty-gritty details and consider the big-picture question: What are you looking for in a dedicated transportation partner?
You’ll be working closely with your dedicated provider day in and day out, so choosing a carrier that aligns with your expectations for this partnership is equally as important as finding the right capacity, equipment, and drivers.
To help you quantify your expectations and preferences as they relate to a dedicated transportation partnership, here are some questions that go beyond the basics of capacity and cost:
CUSTOMER SERVICE
- What commitment or guaranteed service level do you require from your carrier regarding on-time performance?
- How available do you expect your dedicated partner to be? Do you require 24/7/365 availability, or are business hours on weekdays sufficient?
- What do you consider a “timely” response to an issue?
- Do you prefer to have a single, dedicated point of contact for your account, or are you more comfortable with a team approach?
- How would you prefer delays or disruptions to be handled?
- How would you prefer your partner to manage emergencies, such as vehicle breakdowns, weather disruptions, or unforeseen/significant delays?
FLEET AND DRIVERS
- How much flexibility do you need from your provider regarding scaling capacity?
- What degree of fleet customization would you like available to you, if any?
- Is it important to you that your carrier offers branding opportunities?
- Do you have any specific requirements for driver training?
- What are your safety standards and expectations?
TECHNOLOGY
- Do you need/want your provider’s digital systems to be compatible with your company’s for order management, invoicing, or analytics?
- Is it important to you that your carrier provide digital tools like real-time tracking, a customer dashboard or portal, or other technologies?
- Are you open to implementing new systems to better align with your provider’s technology?
GOAL ALIGNMENT
- How would you prefer your partner to measure and report performance?
- How will you assess your partner’s performance internally?
- How often would you expect to have performance review meetings to assess your dedicated partnership and ensure alignment with your business goals?
- Are you looking for a dedicated partner who can contribute to your company’s sustainability goals via options for fuel efficiency, route optimization, or other green practices?
Make an Informed Decision for Your Supply Chain
The right logistics solution isn’t just about moving freight — it’s about creating a partnership that drives efficiency, reliability, and value for your business. Dedicated transportation can offer tremendous benefits like guaranteed capacity, cost predictability, and operational control, but it’s not a perfect fit for every company.
Consistent freight volumes, repetitive delivery routes, financial stability, and clear expectations for your transportation partner are critical factors to consider before making the switch.
By evaluating your business’s unique shipping needs, operational challenges, and long-term goals, you can determine whether dedicated transportation makes sense for your operations.
Armed with this knowledge, you’re better equipped to assess your options, avoid costly misalignments, and approach potential carriers — dedicated or otherwise — with confidence.
If your struggle to find consistent capacity is a main motivator behind your interest in dedicated transportation, why not check out our Find A Truck Faster Guide?
This free, downloadable resource offers 12 tactics for making your freight more appealing to carriers, so you can more reliably secure coverage and keep your supply chain moving efficiently.
