Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Posted by on in Best Practices in Freight Management
  • Font size: Larger Smaller
  • Hits: 2179
  • 0 Comments
  • Print

Engage your Business Partners in your Supply Chain Decisions

b2ap3_thumbnail_dreamstime_l_104545619.jpg

Carrier costing models have evolved over the past couple of decades. Freight rates are based on the complete set of transportation-related processes at origin, in transit, and at destination, to serve each client. To effectively manage freight expenses, shippers must have a full understanding of all three elements.

Shippers with weak shipping order procedures and staging processes drive up the cost of freight transportation. Shipments that move at peak times, in congested areas, to remote areas, or on circuitous routes, drive up the cost of freight transportation. Consignees that disrupt or slow down the delivery process, that consistently extend a delivery beyond standard Hours of Service, that charge fines for late deliveries, have a significant negative impact on the financials of the shipper. What takes place during the pick-up and loading process is only part of the expense of moving freight in a cost-effective way. One of the biggest mistakes a shipper can make is to think that after they have selected high quality carriers, negotiated competitive freight rates, and trained their carriers on how to load their freight, their job is done. It isn’t.

The world of freight has changed. Hours of Service regulations coupled with the ELD implementation have increased the focus on driving and delivery windows. Strong economic conditions have created capacity shortages. Driver shortages have made capacity even tighter as carriers have had to park equipment across North America. Shippers and consignees with ineffective pick-up and delivery processes can increase the number of transit days beyond previous norms and raise costs. Shippers with chronically inefficient processes have been facing not only higher rates, but also a shortage of capacity. This can jeopardize customer retention, revenues and profits. What can shippers do to prevent this from happening?

Gain an Understanding of the Three Components of Freight Transportation for your Business

In most organizations, the sales team has responsibility for securing and retaining customers. But sales personnel are often not logistics professionals. They don’t have the expertise of their logistics and transportation colleagues. The first step in ensuring a fluid and reliable supply chain is to gain an understanding of all three components of transportation in serving your customers. (Note that for intermodal shipments, this could extend to five or six components with the addition of drayage moves). It is the responsibility of logistics managers to gain this understanding. You cannot manage something if you don’t have this knowledge, and if you don’t have the metrics to measure each component. Telephone calls will not do the trick. Site visits will be required to selected locations to gain the full perspective.

Engage your Carriers and Consignees

Equipped with this knowledge, a shipper can have a meaningful discussion on “pain points” associated with each component of their supply chain. This allows one to focus on what can be done to increase efficiencies and reduce costs. Can earlier or nighttime pickups be arranged? Would it make sense to have trailers dropped in the yard? Can pickup and delivery windows and appointment processes be improved?

Each area for improvement should be documented as a work plan with objectives, tasks, identification of persons responsible, metrics and timelines. Meetings should be scheduled to monitor progress. As one set of tasks is completed, the next set of tasks should be defined, and the process repeated.

Companies that take these steps can become “Shippers of Choice.” Carriers are seeking “carrier-friendly” shippers; shippers are seeking carrier partners.

Relationships with transport companies can be taken to a higher level through the creation of “core carrier” programs. For carriers that prove themselves to be trusted partners, enhance these relationships through information sharing and communication. Carriers like consistency in freight flows. For carriers that earn your trust and respect, help them by supplying them with consistent flows on certain lanes. Even if you bid your freight every few years, give your “partner” carriers the right of first refusal on their blocks of business.

Pay particular attention to drivers. There is an industry-wide shortage of qualified drivers in North America and this is likely to worsen over time. Keep drivers productive and satisfied. Provide driver amenities such as restrooms, break areas, and parking to make your locations more desirable. When a driver is on the clock, so is everyone in the supply chain. Ensuring drivers have a positive experience serving your company, and your consignees, should be a priority in every core carrier program.

Finally, look at the full range of capabilities before selecting carrier partners. Have they got enough equipment in their fleets to service your needs in off-peak and peak periods? Are they able to retain drivers? Do they have one or more warehouses to provide short term storage? Do they have a brokerage or logistics arm to handle additional volumes during peak periods? Do your due diligence with each core carrier to make sure they bring a range of assets and skills to enhance your business. Strong carrier and consignee partners can be a significant competitive advantage.

 

To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (http://paper.li/DanGoodwill/1342211466).

0

Comments

  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Thursday, 28 March 2024

Most Recent Posts

Search


Tag Cloud

President Obama USMCA 360ideaspace automation Leadership freight bid Rail Harper Davos speech freight forwarders home delivery Sales routing guide economic forecasts for 2012 NAFTA Training Leafs Canadian freight market NS e-commerce Covid-19 Trucker Protest recession freight cost savings driver pay Broker Deferred Packaging Scott Monty Canada U.S. trade Career Advice the future of transportation Infrastructure Warehousing Canada's global strategy Donald Trump Toronto Maple Leafs small parcel derailments Truckload EBOR Cleveland Cavaliers MBA supply chain management Doug Nix consumer centric US Economy APL Transloading David Tuttle intermodal freight rate increases tanker cars TMS Justice BlueGrace Logistics Freight Carriers Association of Canada Education LinkedIn Transplace CSA last mile delivery asset management Crude Oil by Rail Sales Strategy Management General Motors freight marketplace Carriers University of Tennessee Digitization JB Hunt LTL Success robotics 3PL online shopping Swift Twitter China Otto Dan Goodwill Yield Improvement energy efficiency Global Transportation Hub FCPC Distribution truck capacity Bobby Harris Load broker drones Map-21 truck drivers dynamic pricing Dedicated Trucking Business Development Muhammad Ali Transcom Fleet Leasing Regina shipper-carrier contracts Shipper Freight Matching UP Global experience Finance and Transportation Grocery $75000 bond Software Advice ShipMax Sales Training MPG Facebook trucking company acquisitions Business Strategy Job satisfaction coaching cheap oil 2014 freight forecast Dedicated Contract Carriage Hockey 3PLTL Freight Rates Value Proposition freight payment Habs LCV's selling trucking companies Life Lessons Canadian economy computer protection ProMiles freight transportation in 2011 Success failure entrepreneur Hudsons Bay Company pipelines FCA economic outlook Transportation service Reshoring Transportation Adrian Gonzalez Canadian Protests rail safety freight RFP US Election New York Times laptop Geopolitics Emergent Strategy Search engine optimization Transport Capital Partners (TCP) FuelQuest Horizontal Supply Chain Collaboration US Housing Market Trucking capacity shortage broker security Associates Colilers International Social Media in Transportation Freight Shuttle System CSX technology Failure autonomous vehicles ELD Schneider Logistics IANA Celadon computer security Government freight agreements Electric Vehicles Packaging carrier conference future of freight industry Freight Politics Outsourcing Sales Freight Capacity NMFC Fire Phone freight broker Digital Freight Networks CP Rail marketing Rotman School of Business Entrepreneur employee termination network optimization Wal-Mart Canadian truckers truck driver peak season Railway Association of Canada Masters in Logistics Climate Change Load Boards YRCW Conway Consulting 2014 economic forecast CITA Shipper Pulse Survey natural disasters Microsoft bulk shipping risk management Tracy Matura Omni Channel 2014 freight volumes autos hiring process US Auto Sales Freight contracts Canada Loblaw Freight Recession FMS TMP Worldwide Business skills financial management Stephen Harper Trade Vision buying trucking companies freight transportation conference Montreal Canadiens transportation newspaper digital freight matching economy 2013 Economic Forecast Crisis management Sales Management Training New Hires Online grocery shopping Comey CRM FMCSA CN KCS professional drivers Rate per Mile broker bonds business security home delibery CN Rail capacity shortages Retail transportation Freight Management Werner fuel surcharge freight payment freight audit Amazon shipping dark stores Canadian Transportation & Logistics Retail Accessorial Charges shipper-carrier roundtable Uber Freight business start-up dimensional pricing customer engagement Derek Singleton Trump Social Media solutions provider Ferromex cyber security Keystone Pipeline Whole Foods Transportation Buying Trends Survey cars transportation audit transportation news Driver Shortage Driving for Profit BNSF shipping wine Canada-U.S. trade agreement YRC Inbound Transportation Business Transformation Strategy 2012 Transportation Business Strategies. Jugaad shipper-carrier collaboration Surety bond Spanx trade Coronavirus 2015 Economic Forecast small business US Manufacturing freight costs CSA scores TransForce Doug Davis mentoring computer Tariffs Blogging Right Shoring NCC driver shortages driverless freight audit Anti-Vax USA Truck RFP freight transportation driver Blockchain Toronto Impeachment

Blog Archives

March
February
December
October
September
August
June
May
April
March
January