3PLs are struggling to find reliable carrier capacity as older truck drivers retire without a new crop of fresh blood to replenish the ranks.
Developing strong shipper-carrier relationships is key to maintaining a reliable carrier network, especially as we move into peak season.
Truck capacity has grown “extremely tight” and “edged even closer to 100% utilization,” according to a State of Logistics report released this summer by the Council of Supply Chain Management Professionals and reported on by the Wall Street Journal.
The American Trucking Association estimates there is a shortage of between 35,000 and 40,000 drivers in the U.S. trucking industry, and that number is expected to grow.
A 3PL is only as reliable as its network of carriers, which is why forward-thinking 3PLs are listening to their carriers’ concerns and building long-term, collaborative partnerships.
1. Work for a win-win. Work with your carrier to determine which lanes and freight work best. Carriers no longer operate under the model of taking all the freight offered to them. With the increase of transportation management systems, tighter driver availability, and growing regulatory guidelines, it is essential to collaborate with carriers to ensure you are adding profitable business to their network. This will solidify a long-term relationship that will save you from costly changeovers.
2. Follow through on commitments. If you intend to hold your carriers to their commitments, then you should honor your commitments to them. Carriers base their prices on the data you provide. Supplying inaccurate data or not shipping in the lanes and tonnages you commit to could lead to renegotiation and changing carriers sooner than you anticipated.
3. Provide data. Good data is important to carriers during the bid process. In addition to providing lane and tonnage data, you also need to provide freight characteristic percentages and monthly volumes. That information helps carriers plan appropriately with regard to locations and any specific freight characteristics, as well as for seasonal changes in volume.
4. Share opportunities. When new opportunities arise, bring them to your partner carrier first. Everyone benefits if you can come to an equitable agreement. You benefit from a smooth transition and save the time and expense of a formal RFP. The carrier benefits by earning more of your business.
5. Treat drivers well. Anything you can do to make your facility more driver-friendly helps your carriers retain drivers, which reduces their operating costs to save money. A long-term driver will know your business and your procedures, and makes the pickup and delivery process more efficient.
6. Mix it up. Talk to your carrier about operational changes you can make that won’t impact your operations. For instance, if you already run a weekend shift, why not offer weekend trailer swap options to your carrier?
7. Plan. When you begin a new partnership, give the carrier time to get its system ready and trained to take on the new lanes and freight. Not doing so can get the relationship off to a costly, rocky start.
8. Communicate. Shippers should hold quarterly meetings with their carriers to review performance metrics, and new services and options, and to strengthen the relationship. Business review meetings should include discussions on high-cost drivers, so strategies can be implemented that reduce costs as opposed to raising rates. Working together prior to renegotiation will improve and solidify the partnership.
9. Use technology. Shippers expect carriers to provide real-time data on shipments, and carriers have gone to great expense to do so. In return, shippers need to abandon electronic data interchange use programming options that provide a smooth, accurate transfer of data without requiring additional manual work on either side.
10. Monitor interactions. Ensure you provide accurate information and that customers are treated with respect. A good relationship at all levels of the organization is the best way to ensure the shipper/carrier partnership is strong and healthy, which reduces costs and improves service.
Thanks to Mark Hamblin, VP of sales at LTL carrier Saia, who first provided these tips to Inbound Logistics.