February 2019 | How-To | Ten Tips

Becoming a Shipper of Choice

Tags: Supply Chain Management, Logistics, Supply Chain

In today’s environment, carriers can be selective about the shippers they work with. Here’s how to ensure capacity by becoming a “shipper of choice.”

1. Create an efficient dock experience. Shippers who unload efficiently and quickly without depending on driver involvement help carriers avoid poor trailer utilization or excessive trailer inventories.

2. Optimize shipment routing. Shippers who are able to optimize shipment routing and facilitate efficient "one pick, one drop" loads are highly appealing to most carriers. In fact, smarter asset utilization and route optimization benefit both shippers and carriers through improved service levels and lower overall costs.

3. Focus on network alignment. Shippers should consider the value of aligning their freight to a carrier's preferred lanes and backhaul needs. Carriers with a balanced network can significantly increase operating efficiencies and cost savings with consistent volumes, fewer empty miles, and improved driver productivity.

4. Provide network visibility. Shippers that enable full visibility into their current and forecasted freight demand provide carriers with more certainty that their trucks will arrive at the right place, at the right time. In return, carriers will reward efficient shippers with enhanced service levels and reduced freight costs.

5. Go beyond transactional. Shippers should focus on moving from purely transactional interactions to the more strategic level. This means creating an atmosphere where both sides realize tangible and sustainable value. Focusing on network alignment is one great way to achieve this status, as is thinking holistically about carrier-friendly business practices and policies.

6. Be flexible with contract negotiations. Typically, shippers bid their network annually, but given current market conditions, some are adjusting the lengths and terms of their contracts. Many shippers now request volume guarantees, two- to three-year contracts, price protection tied to performance, or fixed year-over-year price increases to secure rates and stabilize capacity. Shippers can obtain preferred status if they utilize contract flexibility during bids and rate negotiations.

7. Put drivers first. Many carriers evaluate shippers by assessing how well they accommodate drivers with desirable facilities and efficient shipping and receiving docks. Carriers prefer to work with shippers that offer clean and welcoming parking, restrooms, and break areas.

8. Provide flexible schedules. In addition to streamlined yard check-in and check-out, shippers can become more desirable by providing flexible appointments with broad delivery windows. Shippers who can enable 24/7 dock access also have a leg up, because it gives carriers added flexibility, a bonus in the face of increasing demand.

9. Benchmark performance. During times of constrained carrier capacity, shippers should benchmark their performance against industry peers to determine the attractiveness or appeal of their freight to carriers related to operational efficiency, flexibility, and competitive pricing. Understanding how you perform in comparison to similar companies will help in focusing on specific areas that create a carrier- and driver-friendly freight environment.

10. STAY UP on market conditions and data. Shippers must remain aware of transportation market trends to anticipate emerging issues and outline strategies to address them. For example, increased demand for freight transportation requires more careful monitoring to predict and prepare for periods of tight capacity and price volatility. By recognizing these trends, shippers can better forecast and plan accordingly with their carriers to ensure satisfactory load acceptance and service levels.

SOURCE: Ron Lazo, Vice President, Professional Services, Manhattan Associates