Times are Changing
Imagine you are a manufacturer with a truckload of product ready to be shipped off to its destination. The issue, though, is that you do not have a truck to transport your product. So you begin the search for a carrier, fully confident that you will find a carrier suitable for transporting your precious freight. However; every carrier you contact refuses to even look at your freight, much less carry it.
Why is this the case? You never had an issue with contracting a carrier before.
Truthfully, the logistics environment has shifted from a shippers’ market to a carriers’ market. In the past, shippers had an abundance of carriers just waiting for more cargo to haul. Now, with unfilled driver positions, reduced operating hours, and increasing amounts of freight, the shipper is at the mercy of the carrier.
In early 2018, it’s estimated that 60,000 driving positions are unfilled in the industry and for every truck available there are 9.2 truckloads worth of freight waiting for transport. Needless to say, demand has far outstripped supply and as a result, carriers have far more options when it comes to the freight they choose to pick up; far more choices to choose from. Consequently, shippers find that, in order to survive in the market, they need to become a Shipper of Choice.
Operating in a Carriers’ Market
The question is how do you become a shipper of choice in this heavily competitive market? It begins with redefining the way your company interacts with carriers. Historically, companies have often treated truck drivers as pack mules rather than as business partners. Now, if a carrier is inconvenienced by your shipping practices or feels like they are not being treated fairly, they will take their business elsewhere. Rightfully so; no one wants to do business with a disrespectful customer.
The shipper needs to keep the carrier’s interests in mind and structure their shipping process to fit the needs of the carrier. If you take care of the shipper the shipper will take care of you and, in time, you will find carriers coming to you rather than you seeking out the carriers. By paying attention to these areas, you will increase your appeal to carriers and get your freight on the move rather than sitting on the dock wasting company money.
Four main areas a shipper needs to address to become a shipper of choice.
By making your freight attractive to the carrier, you reduce frustration and increase efficiency.
Basically, making freight attractive to carriers involves packaging the freight for optimal transportation. Palletizing freight plays a key role in an efficient shipping process. This allows for easy loading and unloading as well as minimizing the possibility of damaging the freight. Additional ways to increase the appeal of freight include the following.
Drop and Hook – Creating a system of drop and hook freight requires additional warehouse space and additional docks. However, the process of having a preloaded trailer ready for the carrier to hook into is almost effortless and saves a substantial amount of time. It makes wait time for the carrier almost nonexistent and ensures the freight is on the move as soon as possible.
Preloaded Containers – Within the realm of drop and hook, containerization is becoming an increasingly popular method for moving freight. It is quick, reduces waste, and is optimal for intermodal. The carrier can be in and out of the dock without even leaving the truck.
Hire Loading Staff – As an added benefit to the carrier, increase your loading staff. Ensure the carrier that they won’t have to lift a finger while they are at your dock. Having the loaders and the freight ready to go as soon as the truck pulls into the dock is incredibly efficient. Additionally, having a trained loading team guarantees that the freight is being loaded in the best way possible.
Time is money and lost time is lost money. Every minute a truck spends in the dock is a minute it could be making headway on the highway. The average driver only drives an average of 6 hours per day due to time spent servicing, inspecting, loading, and waiting. The faster the process, the more time the driver spends on the road and the more money your company makes. The carriers want freight moving as much as you do, so carriers are happy when they can spend as much time on the road as possible. Here are some tips for reducing time.
No Detention – Do not detain drivers any longer than necessary. No one likes detention, and by following the rules above about streamlining your freight shipping process you cut down on detention time. Be ready with the paperwork and the freight when the carrier pulls in; the sooner they can get on the road the better for both you and them.
Flexible Delivery – Many shippers put strict times on when their shipments need to be delivered and impose heavy fines when the shipment is late. Understandably, not all delivery times can be flexible due to a myriad of factors, but when time allows, it is good to be flexible. By allowing the carrier buffer time when possible for shipment scheduling and understanding when delays occur, it communicates trust between the shipper and the carrier.
Not every shipment can be so lenient and often shippers are under strict deadlines for getting their freight delivered, but when there is communication of urgency, it is invaluable to the shipper carrier relationship. A simple template to use is the At, On, By system. Sometimes you need a shipment at a specific time and date, sometimes on the date is good enough, and if there is little urgency, getting it by a certain date is all that is required
7-day availability – A mistake many shippers make is only having their dock open on certain days, specifically weekdays. By keeping your dock open 7 days a week, your company will begin shipping out and receiving freight more often, which is advantageous for you, and carriers won’t be delayed by exclusive weekday availability. Additional staffing is required but the benefits far outweigh the cost over time. More often than not, this applies exclusively to TL shippers and not as much to LTL so plan accordingly.
When considering the potential complications and number of moving parts in logistics, the importance of clear communication becomes evident. The most sure fire way to mess up a shipment or complicate the process is to be selective with the communication between you, the shipper, and the carrier.
Transparency and honesty are required to keep a shipment moving smoothly and to build a trusting relationship between your company and the carrier. Here are some tips to increase communication between the shipper and the carrier.
Update Policies – Making sure that your policies are available on your website or on your TMS for carriers to review. Update them regularly and address issues upfront through social platforms and through your website. The way the market is structured now, if carriers don’t hear it from you they will hear it somewhere else. Stay up-to-date and remain transparent. A new game requires a new rulebook.
Forecast Shipments – nothing is more aggravating than when a truck arrives late or when they arrive too soon and clog the docks. Communicating forecasts for when shipments will be ready for a carrier to pick up is vitally important. Having an educated approximation on when a shipment will be ready allows carriers time to plan and gives you a deadline to shoot for. The more accurate you are with your forecasts, the smoother the transfer will go.
Additionally, communicate delays if they occur. Delays happen but communication lessens the impact. Additionally, adhering to a set schedule for a specific shipment (such as when a certain shipment always goes out at 1:00pm on Tuesday and Thursday every week) makes it easier for contracted carriers to create their schedule
Make Payments On Time – No one likes being paid late. Communicate to the carrier when payment will come and stick to that date. Delaying payments makes for a messy transaction and upsets the carrier. Be up front and make payments in a reasonable time. In today’s market, many shippers want to age payments automatically; however, for example, if your competitors are making payments in 30 days but you make payments in 15 days, you will receive preference from carriers because your payments come through sooner.
Avoid Unexpected Fees – Late fees and accessorial fees are part of shipping and sometimes need to be imposed to keep carriers accountable and keep freight moving as safely as possible. However, when possible, try to mitigate the impact of fees by communicating with the carrier beforehand. If a certain shipment requires additional charges, don’t wait till the carrier has arrived to tell them about it; be up front and honest. This ties back to the importance of setting clear times that the carrier should arrive and judging the importance of those times realistically.
Outsource a 3PL – All of the above tips are hard to keep track of. In order to minimize the effort required to put these policies in place, outsource to a 3PL. A good 3PL will act as a mediator between your company and the carriers and communicate every detail from submission to payment between the parties involved. It is seamless for your company and a win for the carrier as well.
Among the most requested course of action from carriers is the need for facilities to become carrier friendly. By creating an environment drivers find appealing, helpful, and friendly, they are more likely to want continue doing business out of your facility. Here are some of the ways you can create a carrier friendly environment.
Lounge – Very often drivers get detained or have to wait for paperwork to come through or for the freight to be unloaded/loaded. For these situations, drivers request that a facility include a lounge for relaxation and refreshment. This can be as little as a couple couches and some coffee, however, some shippers have included showers, new restrooms, snacks, wifi, and TV.
Jerry Hatchett, a fleet owner since 1982 asked that shippers “build showers and break rooms and hold an appreciation day for drivers once a month.” Life isn’t glamorous for carriers so helping them feel comfortable goes a long way in securing their trust and, ultimately, their business.
Truck Friendly Facility – When a truck pulls into an unknown lot it can sometimes be difficult for the driver to know where to go and who to talk to. Navigating a complex system of gates and docks frustrates carriers and wastes time. Shippers can easily help carriers by putting up signage around the lot with clear directions and contact information for the facility manager or whoever manages the dock they are going to.
Overnight Parking – Another highly requested way to help carriers is by allowing overnight parking for trucks. This is useful for a number of reasons, primarily by allowing drivers to stay in the lot afterhours if they ended the day at the dock or pulled in after the facility closed. By opening the lot for overnight truck parking, carriers can avoid the inconvenience of leaving the lot to find parking elsewhere, which wastes time and fuel.
Friendly Staff – Probably the most cost effective way to show appreciation for carriers and to ensure they are well taken care of is by simply being friendly. The leading factor in carriers deliberately not doing business with a shipper is a previous bad experience with the employees or management of a facility. Sometimes all carriers want is to simply be shown a little respect and civility.
Make Carriers an Offer They Can’t Refuse
In the end, simply ask yourself, “If I were a carrier, would I want to work with this company based on the shipping process and facility?” Listen to your carriers and structure your shipping practices accordingly. Changes can cost a considerable amount but are guaranteed to yield results.
In today’s shipping environment, the ball is in the carriers’ court. However, if you play the game right and make your company an attractive client to work with, you, as a shipper, will win the ball back and thrive in your business. If you work for your carrier, your carrier will work for you and you can keep your freight on the road like it should be. Moving freight doesn’t have to be an inefficient, and painful process. By following these tips, you too can save valuable time and money and become a Shipper of Choice.