Top Do’s and Dont’s for Becoming a Shipper of Choice
Shipper of Choice.
This phrase has been a hot topic of discussion in the European freight market over the past few years — and for good reason. There are a variety of factors behind this movement of attempting to become a preferred shipper: the influx of technology, tight market conditions, and currently, one of the most compelling: we’ve been living in a carrier’s market.
So, what does this mean exactly?
It implies that hauliers have the luxury of choice due to more shipper demand than haulier supply. That means that shippers of all sizes and industries are concerned that they might be stuck with freight to ship to customers, but no means of delivering it for them because of high competition. This was not the case a few years ago, so trying to navigate this new territory without proper guidance has been daunting for many shippers.
Luckily, there are many strategic supply chain operational adjustments — big and small — that shippers like you can take to help position your company for long-term success. By implementing a few of our top do’s and don’ts, you can become more desirable to ship for —now or in any market condition — which helps drive the long-term efficiency of your supply chain in the future.
Ready to get Coyote’s suggestions to get you on the path to becoming a Shipper of Choice in 2019 and beyond? Let’s dive in.
Preferred Shippers Do:
Give your carriers as much lead time as possible.
Imagine you’re traveling a long way to see your friends and family on the week of Christmas —notoriously one of, if not, the busiest travel day of the year. You’ve asked around and found a reliable friend to come pick you up from the airport. They’ve asked you to send your flight details in advance so they can plan for what airport to pick you up at, what route to take to avoid the most traffic, and when to leave to avoid sitting and waiting.
Would you leave your friend hanging by sending your flight details at the last minute? Likely no — you would do everything you could to keep them from waiting.
We realize that it’s not always possible to know shipping schedules ahead of time and last-minute shipments pop up all the time, but the more lead time you can provide your partner carriers, the better off you’ll all be. By planning ahead, hauliers are able to schedule their operations better, giving brokers more time to source options. And you’ll benefit from likely paying less.
So for carriers, more lead time means fewer headaches when planning and while on the road. And for you, it means lower rates with higher service. Win-win.
Pay your carriers quickly (and accurately).
Many small and mid-sized carriers don’t have access to a lot of financing, which means they see value in the ability of shippers to pay them quickly and accurately. Not long ago, Coyote Logistics asked carriers to tell us what they cared most about. Not surprisingly, of the roughly 100 carriers asked, almost 40% reported getting paid quickly to be “Very Important” to them.
Start investing in your data…
There is more logistics data available today than ever before, and successful shippers are making it a priority to invest heavily in collecting, analyzing, and storing proprietary data. If you haven’t made this investment yet, the first step you need to take is to centralize your data with a proper TMS. With a transportation management system, you’re able to get a holistic view of your supply chain and create a well-reasoned procurement and operations strategy for your company.
All of this proprietary data will not only help you and your company ship more efficiently, but it will also allow you to work smarter alongside hauliers. With data analysis, you can identify underperforming facilities, chokepoints in your network, appointment scheduling best practices, and much more. Which leads us to our next must “do.”
For more information about the benefits of investing in a TMS, read our article “Q&A: How Using a TMS Can Help You Become a Shipper of Choice.”
…and use data to keep score of your carriers.
Can you imagine watching a football game for 90 minutes and by the end of the game still not knowing for sure if your team won? Sure, you had a great time and it seemed like your team performed well. Without a recorded score and confirmed winner, you’re left unsure whether they stand a chance making it to the final at the end of the season.
With all this supply chain data available,hopefully centralized in a TMS, you can begin to create an onboarding process with established KPIs to track with the carriers in your network. Successful shippers know that the more transparent you can be with your needs, the more likely you are to be satisfied.
Hauliers should always know where they stand as well, so with proper data and scorecards, you can provide them with all the information they need — and more importantly, want — to help make sure both sides of the business are operating as smoothly and as successfully as possible together.
Treat carriers like the core business partners they are.
To continue the football analogy, there is something to be said about the importance of being a team player. It doesn’t matter how good of a player you are — if you don’t work well with your teammates then you’ll never make it far.
As with most industries, teamwork and relationships really matter, especially when it comes to working with drivers in the tight-knit freight market. Hauliers, especially smaller ones, tend to value personal relationships. Their business is their livelihood, so finding dedicated partnerships and strong relationships is invaluable to keep cash flowing.
One of the best ways for shippers to achieve relative consistency throughout the ups and downs of the European truckload market’s cycles is to harvest and nurture stable, long-term relationships with core carriers, rooted in mutual trust and respect. Decide who you want to do business with and learn each other’s networks, pain points, business needs, and more — all the good and the bad.
At the end of the day, preferred shippers know that they’re not alone in this journey. The more you can work to develop real relationships with worthy carriers, the better off you and your company will be in the long term.
Preferred Shippers Don’t:
Have long load or unload times.
In today’s fast-paced, technology-driven world, no one likes to wait. For anything. We’ve grown accustomed to having food delivered to our front door at the click of a button. Almost every convenience we can think of is available to us at virtually no wait. But what if it wasn’t just convenience and your paycheck that depended on it? Waiting becomes not just inconvenient, but almost inexcusable.
For both carriers and shippers, time is money — drivers want to get in and out of your facility as quickly and efficiently as possible. Ensure your check-in process is quick, documented, and accurately reflects when a driver arrives on the premise.
Drivers do not have as much flexibility now in recording their hours of service; therefore, they are much pickier about how they spend their tightly monitored time. By building and honoring a reputation for short unloading and loading times, you are positioning yourself as a top-quality shipper to various hauliers in the marketplace.
Skip facility amenities.
Basic amenities can become a make or break for some carriers. No one wants to be on the road for hours, days, or even weeks at a time without the expectation of a warm welcome.
Providing access to basic amenities — even just access to clean bathrooms — goes a long way in the eyes of a carrier. Life on the road isn’t easy, and preferred shipper facilities often include on-site overnight parking, bathrooms, a driver’s lounge, vending machines, and access to free WiFi.
Limit appointment scheduling process.
We know many factors go into scheduling a delivery or pickup appointment. To position yourself as a preferred shipper, the more flexible you can be with your appointment scheduling, the more a haulier will want to pick up your shipments.
Open appointments are especially preferred — having a window to get loaded or unloaded as opposed to a strict appointment is ideal for carriers. With a little flexibility on your end, you are opening your loads to a greater pool of capacity for carriers.
Consider avoidable haulier restitution spend.
Carrier restitution accessorials — demurrage claims, cancelations, layovers, etc. — are mostly avoidable expenses that come directly out of your budget. While they do happen, it’s crucial to keep an eye on how much you’re actually spending on these fees.
Coyote’s proprietary data reveals that if more than .06% of your total carrier spend goes to paying these accessorials, you are potentially taking up too much driver time. With that said, in a tight market, drivers may choose a more efficient facility. As we already discussed, with a proper TMS in place and KPIs to match, you can watch how much you’re spending over time and take actionable efforts moving forward.
Depending on the current state of your supply chain, all or some of these endeavors may seem overwhelming. Becoming a preferred shipper in a haulier’s market — or in any market — is a continuous process and one that takes strategy, vision, commitment, resources, and time. By implementing any of these do’s (and avoiding those don’ts), your efforts will yield a promising return. As a preferred shipper, the more you can optimize your supply chain and operational process now, the better prepared you will be to move goods faster, operate leaner, and increase visibility in the future.