Excerpt from Inbound Logistics | June 25, 2014
Capacity has been top of mind in the transportation world for the past twelve months. Shippers are constantly looking for smarter ways to set their business apart from the competition in the eyes of both asset-based carriers and third-party logistics (3PL) providers. Shippers will be better positioned to ship goods on time and for the best price with these simple yet structured processes. Coyote Logistics offers these tips to help shippers prepare their business for success.
1. Get granular. The more shipping data you can provide to the transportation services provider in the RFP/contract process, the better. A good provider will plan to match its supply very specifically to your demand.
2. Set realistic expectations. Will shipments surge during produce or holiday season? Let providers know your needs up front, based on your shipping patterns, and you’ll see better coverage during those times.
3. Be prepared. Ask worst-case scenario questions around capacity limitations during the RFP/contract process. Does the provider have commitments to other shippers that may affect its ability to service your business year-round?
4. Establish a backup plan. Establish backup rates with a higher acceptance percentage from a reliable 3PL. This will ensure your freight is covered — excluding sticker shock — during surge seasons.
5. Cost isn’t the only important factor. Resources are wasted when providers reject tenders. Your staff wastes time procuring spot rates, which can affect on-time performance and lead to higher costs. A tiered pricing structure based on volume per day combats this issue before it happens.
6. Teach an old dog a new trick. Smart shippers challenge standard operating procedures to allow for more types of capacity. Small changes, like loading dry product on refrigerated trailers or extending loading hours, can significantly increase capacity in tight markets.
7. Explore new shipping options. Modal conversion is one of the easiest ways to reduce costs (and has the added benefit of being good for the environment). Multi-stop and intermodal are two of the most common conversions, but don’t forget about carload rail — even over-dimensional shipments can be converted.
8. Use a finite number of 3PLs. Understand the cost of diminishing returns when it comes to adding 3PLs to your network. Every 3PL added means a little less leverage when you need them most.
9. Be a hero. Help your providers when they need it — one late-night call to get a driver unloaded could save you money in the long run and solidify the provider’s loyalty when times get rough.
10. Be accountable. Good carriers and 3PLs report on their performance; great carriers and 3PLs report on their shippers’ performance. If data shows there has been a change in shipping patterns, work with your provider on a new solution. By continuously analyzing lane data against bid expectations, carriers and 3PLs can help eliminate unforeseen or unnecessary expenses in the supply chain.