“Shippers of Choice” Get Better Service and Lower Costs: Here’s How You Become One

Editor’s Note: Tommy Barnes is president of project44

As any shipper knows, not all carriers are created equal. Beyond offering different pricing, carriers vary in the level of performance and service they provide. These differences have a real impact on shippers' costs, delivery times, product availability and their customers' experiences. If shippers want to partner with the carriers best able to help them realize these competitive advantages, they need to position themselves as a “Shipper of Choice,” a partner who is easy and profitable for carriers to work with.

While being seen as a Shipper of Choice is always valuable, it is particularly crucial when high utilization rates put carriers in the driver's seat, meaning the best carriers have their pick of shippers to work with.

However, even if the power pendulum shifts back toward the demand side in the future, long-term trends point to growing value in being seen as a Shipper of Choice. As we are seeing today, tariff posturing can put pressure on specific routes and drive spikes in utilization. What's more, if shippers want to meet rising customer expectations for fast, on-time product delivery - driven by the Amazon-effect – they must partner with carriers who they can trust to provide them with the performance their customers demand.

To become a Shipper of Choice, companies need to implement processes and install technologies that help carriers reduce costs and increase flexibility and productivity. For example, carriers want shippers who can quickly provide high-fidelity information on shipment timing, amount and location, as well as clear driver instructions, so they can plan ahead and waste little time picking up shipments. When they get to the pickup location, carriers want to be in and out with as little dwell time as possible – as the saying goes, “If the wheels aren't turning, you're not earning.” This does not just mean fast loading of freight, but also accurate freight paperwork that is ready at pickup time. Carriers also want to be paid quickly, with streamlined audit exception and other payment processes that reduce their overhead costs.

So how can shippers demonstrate to carriers they understand these and their other business needs and will treat them as a true partners? The first step is realizing that they can't become a Shipper of Choice overnight. Becoming (and staying) a Shipper of Choice is journey.

Establish Metrics, Audit Procedures, Digitize Processes

This journey starts with a company prioritizing which carriers they want to work with, and then building an open line of communications to identify their pain points. As part of this discussion, shippers need to be transparent about their procedures, so carriers understand what can be changed to address their pains and what can't. Shippers should use these discussions to develop clear KPIs and other metrics that address their carriers' pain points, such as driver idle or dwell times.

With a clear understanding what to measure to ensure progress is made against their carriers' pain points, companies can then begin auditing their shipping procedures, looking for opportunities to achieve these metrics. For example, what do they need to do differently in order to provide carriers with earlier visibility on future shipments? How can they ensure freight and paperwork is ready before pickup? How can they streamline audit exceptions and automate shipment payments? Process improvements like these will improve carriers' capacity utilization, reduce their driver downtime and increase their profitability, demonstrating to the carrier the shipper's commitment to their partnership.

In making these processes improvements, new technologies play an essential role. For example, advanced visibility platforms enable shippers to digitize and automate delivery ETAs for incoming shipments to their facilities. With this information, they can better coordinate timing and logistics at their loading docks, allowing them to provide carriers with more accurate and earlier insights on upcoming shipments. These technologies also ensure shippers and carriers are working from the same “single source of truth,” leading to fewer mistakes and confusion regarding appointment times, freight weight, or shipment status.

By digitizing shipment data and automating how information moves between systems, these platforms help all parties in the transportation value chain streamline their operations and the reduce risk of human error. Certain advanced visibility platforms also support automation of digital payment processes that reduce work for both the shipper and its carrier partners, while also helping carriers get paid quicker.

Open discussions with carriers regarding their pain points, careful audits of existing shipping procedures to determine how to address these issues, and the adoption new technologies to streamline and enhance processes can all help shippers transform their carrier relationships. Of course, this transformation is a journey, and ongoing carrier discussions, shipping process reviews and technology upgrades will be needed on an ongoing basis. Yet, just by embarking on this journey, shippers can demonstrate to carriers how important they are to their success, and take an important step forward on the path to establishing a reputation as a Shipper of Choice.

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