How to Be a Shipper of Choice
In this era of high load-to-truck ratios, shippers that make themselves desirable partners for carriers will keep their business rolling: Here are six ways to be a shipper of choice.
When it’s a seller’s market, as it has been for a while, carriers are understandably selective about who they want to work with. Shippers and facilities that prove themselves to be reliable partners and make the carrier’s life easier will become desirable and valued customers.
The downsides to not being near the top of a carrier’s “want-to-work-with” list are many: not being able to get a truck when you need one, damaged relationships with customers, lost business, reduced profits, and more. The domino effect starts at the top, so it pays to look at the big picture of what your company can do to make sure your loads aren’t left sitting on the dock when capacity is tight.
Collaborate and communicate
Treat your carriers as your partners — for that is what they are. Meet once or twice a year with your most-used carriers to share metrics and determine how best to work together. Find out what’s important to them and what changes you could implement to help streamline their processes and keep the drivers and loads rolling. A good place to start is to determine where your goals and your carriers’ goals align. Build mutual trust by communicating regularly and openly.
If you’re a consignee, find out how you can avoid causing delays and problems for both the carrier and their direct customer.
When beginning to work with a new carrier, be fully transparent and let them know what problems other carriers have had with your loads in the past, where the trouble points are, and what you’ve done or are doing to mitigate those problems. Find out how you can work together to most efficiently move your loads from A to B (and onwards).
Plan ahead and be flexible
Identify carriers that are a good match for your lanes, and check indexes such as the Transportation Services Index, DAT Trendlines, and the Cass Freight Index to monitor capacity trends. Also consider average daily volumes. Do you have seasonal surges? How can you flatten the year to improve lane flow seasonality?
Find out where and at what times of the day and week carriers have empty miles and analyze your shipping operations to see if you could match some of your tenders with those lanes and times. Consider weekend pick-up and delivery, as well as off-peak times that allow drivers to avoid rush hour and other heavy traffic flows.
Also, providing flexible appointment times opens up a greater pool of available drivers and can enable carriers to fill empty miles.
For regular deliveries, create a regular time slot to aid the carrier’s operations planning. You can also systematize and streamline your processes so the driver knows exactly what to expect and the loading or hook-up can proceed like clockwork (or as near as possible).
Helping carriers to plan ahead will prevent service failures, as well as keep down costs. An analysis conducted by the trucking app Convoy across its network revealed that “the cost of truck increases exponentially for tenders received with fewer than two days’ notice.”
Automate (TMS + API)
Investing in a transportation management system (TMS) that uses application program interfaces (APIs), or upgrading your current TMS to be fully automated, will save time and paperwork for both your operation and the carriers’. As well as providing you with accurate rates and service times and timely track & trace information, it will streamline the load tendering process.
Large carriers receive a great number of requests for quotes every day. Tendering your loads with all the necessary detail via a TMS will shorten the carriers’ analysis time and increase the likelihood you’ll get a quick and favorable response.
And while communication is critical, so is not overloading the carrier with requests for information or updates. Keep phone calls and emails to a minimum, and use a TMS with API connections to handle as much of the communicative load as possible. Be sure to provide clear instructions for accessing 3rd party systems and communication guidelines for key points of contact.
Count the driver minutes
Treat drivers with courtesy and respect their time. Provide clean bathrooms, free Wi-Fi, refreshments, and a comfortable place to sit if they have to wait for a load. Minimize time at the dock and time at the gate, as well as loading time. Particularly now that driver time is tracked electronically with ELD, every minute is money.
Under the Hours of Service rule for drivers, the definition of “on-duty” includes tasks such as waiting to pick up and deliver at a shipper’s facilities and waiting to provide or receive receipts for shipments, so if you know ahead of time there will be delays, let the driver know so they can go and get something to eat or attend to other business. Drivers will appreciate shippers that enable them to use their on-duty hours to keep freight moving.
Do you need to make capital investments in facilities or a dock upgrade to accommodate drop and hook or preloaded containers, or to improve traffic flow? Do you need to hire more staff? Investigate to determine underlying causes of issues such as long wait times, frequent delays, and rescheduling of loads. Even things as simple (but often overlooked) as clear signage and prepared paperwork can go a long way toward streamlining the process and maximizing efficiency.
Also, talk to drivers to gain insight into how you can become a desirable partner. Ask them how they would rate you as a shipper and in what areas you could improve. Truckers in North America are not obligated to accept loads despite a contractual relationship, so being a good partner will ensure your loads aren’t left sitting on the dock when load-to-truck ratios are high.
Several studies and surveys have shown on-time or early payment to be the number one most desirable trait in a shipper. Up to 70% of carrier expenses are net 8 days, and they need strong cash flow to pay drivers, so carriers will appreciate prompt payments on your part. A TMS will streamline, automate, and greatly speed up the invoice audit and payment process.
And when negotiating rates, remember that the carrier also needs to be profitable. If you consistently try to score below-market rates, the carrier will be more likely to refuse to carry your loads when capacity is tight.
Think long term
Being a consistent and reliable partner benefits the carriers you work with, and it also benefits you by providing greater stability and predictability for your logistics operations. As in all areas of life, communication, transparency, respect, and the trust they create result in a mutually beneficial relationship that both parties want to continue and contribute to for the long term.
Developing long-term strategic relationships with your preferred carriers will ensure you are a shipper of choice and will keep both your business and theirs rolling.