Capacity levels are strained and reaching all-time historical tightness. Today, carriers are in high demand and have more choices on which organizations to work with than ever before. Shippers are innovating and implementing various strategies to make them a “shipper of choice” and connect with carriers to move their freight while avoiding sky-high rate increases.
Shippers who lived up to historical freight volume commitments and proved dedication to their carriers before this market shift will continue to have a capacity advantage in today’s market. There are, however, several things shippers can do to start improving their carrier relationships and access to capacity now.
In an attempt to be a “shipper of choice” companies generally focus on creating carrier-friendly spaces and policies. These tactics range from providing basic amenities like clean bathrooms and access to water, to more in-depth operational changes like flexible appointment windows and reduced detention time. While all these factors are important, they are not the only ways shippers can build better relationships with their providers.
BlueGrace Logistics Regional Vice President Chris Kupillas has some unorthodox advice to help shippers set themselves apart in a volatile market like this: innovate from within first.
“Shippers need to look internally first. Many shippers aren’t planning very well on the front end,” Kupillas said. “They should look as far upstream as possible to help manage orders and capacity. If shippers manage orders, they can build out a load plan ahead of time. It will save them warehouse space, help them communicate with carriers and allow them to build out a consistent weekly shipping schedule, which carriers appreciate.”
When shippers create more predictability and structure within their freight networks and capacity needs, it becomes easier to build long-standing relationships with reliable transportation providers. Carriers appreciate and thrive on the visibility of their next load, and if a shipper can help consistently provide that next move information they will gain on becoming a “shipper of choice.”
Carriers aren’t the only ones who benefit from shipper prioritization and order-level optimization. Having a consistent shipping schedule and reliable carrier network help shippers manage their costs by minimizing the need for same-day or next-day capacity.
“Planning and optimization are really not necessarily carrier-driven or carrier-specific. The strategies shippers focus on lead to becoming more streamlined, efficient and create more profit,” Kupillas said. “Shippers will develop more efficiencies internally if they can plan more effectively, thus benefiting themselves and the carrier.”
The majority of shippers struggle to evolve or change their operations while maintaining the day-to-day functionality and execution of their business. Managing change can be especially difficult in tight market conditions when cross functional departments may lack communications and collaboration. This issue is exacerbated by the fact that many shippers have a series of data silos within their own organizations, making it difficult to implement a carrier and freight optimization strategy.
In that case, shippers can consider using a third-party logistics provider who can help them extract the value they’re looking for through data analytics, increased visibility and better carrier relationships that ultimately yield higher service and execution.
“Shippers should engage with providers who are willing to dive into the data and processes across different channels of the organization to understand how transportation is impacted by sales, finance and customer support,” Kupillas said. “If we can knock down data silos within an organization, the company can operate more efficiently.”
Ultimately, shippers hoping to become the best possible solution for carriers need to invest in their own business first. Driving out waste, increasing inefficiencies and creating organizational structure has the potential to benefit everyone involved in the supply chain, not just the shipper themselves. After all, making a carrier’s job easier is at the core of being a “shipper of choice.”