As a logistics professional for over 20 years, I've seen many changes take place on the transportation side of things.
Think back to the late 1990s; email was just starting to become mainstream in the business world, the internet was gaining popularity, and the smart phones we now rely on to get through our entire day was a pay phone; unless of course you were Zack Morris.Business relationships were built on face-to-face interactions with open dialog about each party's pain points and strategies. The goal was working together to both become more efficient, and to be better suppliers to customers.
Email, the internet, and of course our smart phones have easily made us all more productive. However, the face-to-face business interactions that now take place on our electronic devices make the idea of a partnership seem more like a one-way street.
Webster defines a partner as "one who has a part in anything with another; a partaker; an associate; a sharer."
Perhaps it's human nature to be a bit skeptical when hearing your customer refer to themselves as a “good partner.” Especially when, in your experience, their idea of a partner varies from the definition provided by Webster.
A few examples are:
- being made to reduce your rates for another round of the bid,
- when you haven’t been paid in over 60 days and can’t find the right person to talk to, or,
- being told to continually add services such as 24/7 dispatch coverage, website load tracking, a dropped trailer for one load a week.
I could go on and on, but if you're in the logistics industry, you get my point.
In this market, I would argue that the benefits of shippers and carriers working together in a reciprocal partnership is more important to productivity, efficiency, and the overall partnership than ever.
With margins for carriers at new highs and the spot market as hot as it is, we have the flexibility to be more selective in the freight we accept.
Just like in recess kick ball, the best partners for your team will get picked first.
Not having freight picked 1st leaves the shipper moving down the list to the next carrier to move their freight or using the spot market - either way, they are wasting time looking for a new carrier while spending more money to do so.
As I sit and think about Webster's definition, I can't help but think about all the customers, both past and present, that displayed the qualities of a great freight partner.
Exhibiting these 4 qualities to your carriers will ensure your freight is not passed over to a more partner-like shipper.Communication
As with most partnerships, business and personal, communication is key. Be upfront with your carriers, take the time to meet with your top carriers to discuss solutions to problems and most importantly, expectations.
Now don’t expect a carrier to just take your expectation and work to them without you agreeing to meet some of their expectations as well. For example, load commitments work both ways. If a carrier is going to commit to accepting 5 loads a week, they are going to structure their fleet to meet that commitment; be ready to tender those 5 loads on time.
If you’re working with a carrier that also provides additional logistics services such as brokerage, warehousing, or contract packaging; keep them in the loop for additional projects or introduce them to the decision makers in those areas. Often times, those departments can work together to provide a flexible solution to create efficiencies across your entire supply chain.Pay invoices quickly
A great logistics partner understands the need for carriers to be paid quickly. Partners that we like to continue doing business with will pay their invoices in 15 – 30 days upon receipt. That’s because they know that we have to pay our drivers and fuel vendors in 7 days. Quick payment helps cash flow in an already tight margin industry.
When conducting annual bids, invite your carriers to sit across the table from you and discuss each other’s challenges. Not only will this help your carrier plan and prepare their fleet to maximize their operation, it will make both parties more efficient.
When planning upgrades or new technology such as a new load tendering system, give your carriers plenty of notice to adapt to the change. If you’re going to charge them transactional fees for using the new system – charging them for working for you – be prepared to see a rate increase or an accessorial administration fee added to the lane.
And lastly, we wouldn’t be talking about the true freight environment in 2018 if we didn’t mention drivers. Shippers who provide driver friendly lanes and facilities will see more of their freight taken. Not only do carriers need to keep their drivers moving, they need to keep them happy. Drivers are in short supply, making it easy for them to find a new carrier to call home that may offer more driver-friendly freight.
We’re looking for dedicated lanes so drivers have predictability in their daily lives. Round trip options also help carriers get their drivers home as often as they need to be. Facilities that offer drivers restrooms, parking, and flexible delivery times are easy to dispatch to drivers, which keeps driver morale and engagement where it needs to be while keeping drivers in the trucks, moving your freight.
As shippers work to commoditize transportation providers even further, we can't let true partnerships slip to the way side. Freight partners who prioritize communication, quick payment, planning, and providing a driver friendly atmosphere will have their freight picked over the not-so-partner-like-shipper every day of the week.