2019 promises continued growth and above-average truckload demand. While there are no shortcuts to fixing the capacity gap, shippers can take steps to ensure their freight moves on time.
1. Create a core carrier program. Establish relationships with large providers who can help you with a run-up in demand and regional carriers who have a compelling value proposition in the markets they serve.
2. Schedule quarterly touch points. Ask carriers to be intentional with their objectives. Agree on measurable service benchmarks and meet quarterly to discuss performance and strategy.
3. Build long-term relationships that transcend market cycles. Carriers want to create stable, long-term relationships with shippers, so establish yourself as a good business to work with.
4. Be intentional with bid objectives. If you plan to bid your network, be direct about your intent. If you want to improve your cost to serve, ask carriers to help identify opportunities to decrease inefficiencies.
5. Keep bidding roundsto a minimum. Establish a streamlined bidding process that allows for more upfront understanding of your needs and the carriers’ capabilities. Holding multiple bidding rounds, especially when there are no consequences associated with each round, enables carriers to hold back their best rates until later in the bid. This is time-consuming and inefficient for both shipper and carrier.
6. Establish network consistency. Carriers value consistency. If you’re happy with the overall relationship, provide incumbents with an opportunity to keep that freight.
7. Use multiple modes to maximize capacity. Different transportation modes provide solutions to different needs. Consider how those modes can work together to create a successful shipping model. For instance, intermodal is best for hauls of longer than 450 miles that have transit time flexibility, while dedicated is best for service-sensitive lanes in high-density markets, DC-to-store, and first-mile/final-mile deliveries.
8. Be a shipper of choice. With the implementation of electronic logging devices, all carriers have access to data about your shipping processes. Freight characteristics, velocity, and utilization matter. Carriers will price in your network’s inefficiencies, so identify them and work to improve them.
9. Focus on the driver. 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. Making this a positive experience is a priority.
10. Tap your third-party provider’s range of services. Warehousing, fulfillment, transportation, value-added services, technology—the more you can obtain from a single provider, the more seamless, scalable, and cost-effective your supply chain will be. Centralizing the logistics function helps to ensure that you provide consistent service and offers better predictability and reliable deliveries. If getting closer to your customer is a priority, consider leveraging your provider’s facility network.
—Haroon Syed, vice president, commercial development, Schneider