How to Become a Shipper of Choice
As shippers, carriers, and logistics service providers prepare for a busy Q4 2018, here are some ideas for easing the capacity crunch, controlling costs, and becoming a "shipper of choice."
Carriers in the driver's seat. When the freight market shifted, so did the balance between shippers and carriers. In today's market, carriers can afford to be selective about the shippers they choose to work with. So what makes a shipper, and its freight, undesirable to carriers? And how can shippers avoid these costly hits to their reputation?
The largest factor boils down to Hours of Service (HoS). When the ELD mandate enforcement period began in April 2018, carriers' available time—as measured by HoS—instantly became more valuable. It turns out time is money, after all. Any delays that waste time are to be avoided, and repeat offenders risk becoming persona non grata to carriers.
Hands down, the primary culprit for unanticipated and unwelcome delays is excessive loading and unloading time at shipper facilities.
Typical detention charges kick in only after a two-hour grace period, and typically amount to only about $50-$100 per hour. Because those charges don't begin to cover lost potential revenue, many carriers bake the cost of their lost time into the rates they offer to problem shippers.
You can make the case that loading and unloading delays at shipper facilities are partly to blame for the current capacity shortage. Eliminating shipper delays could increase available capacity by a whopping 30 percent, says Bob Costello, chief economist at the American Trucking Associations.
No time to wait. The most effective approach to addressing excessive wait times is to eliminate them altogether, through the use of drop trailer programs.
Drop trailer programs can be challenging for shippers to design, implement, and manage, which is why many turn to 3PLs for assistance. Shippers can take advantage of a 3PL's access to capacity to identify carriers that are willing and able to participate in drop trailer programs.
Once the 3PL identifies appropriate carriers, it can manage the drop trailer program on the shipper's behalf, eliminating excessive wait times while relieving shippers from managing the program.
But drop trailer is not always an option, due to insufficient yard space or other factors. In these cases, 3PLs can assist shippers by analyzing the root cause of shipping dock delays. Identifying peak loading hours, then planning pickups and deliveries accordingly, can be effective when drop trailer programs are not feasible.
Be hospitable to drivers. Ensure that dock staff are courteous, and that drivers can use restroom facilities and easily park their trucks in convenient locations. People tend to do business with people they like. Carriers look dimly upon shippers who chased low rates at the bottom of the market instead of building mutually beneficial relationships.
And in the current market, there is plenty of freight to go around, and not nearly enough trucks to haul it all.