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163 Ways to Supercharge Your Supply Chain (part 3)
Multiple factors go into choosing the best less-than-truckload (LTL) and truckload carrier partners for your business. Here are some tips to keep you on the right road.
55. When obtaining price quotes, accurate information is key. When getting price quotes or bidding out future business, know how much weight you will be shipping and the number of pallets your product will move on. Having this information will save you money and help you stay one step ahead of your competition.
56. Understand the pricing structure. If price is your primary criteria for picking or evaluating carriers, then you must be aware of all factors affecting your net transportation cost. When reviewing each carrier's pricing, compare key factors such as tariff base rate, discounts, and applicable or waived accessorial charges. Using carriers who allow you to base all pricing on a single or common rate structure may create some benefits, such as one basis for carrier pricing comparison, simplified audit technology/automation, a benchmark for negotiating and compliance, and control over cost variations when general rate increases occur.
57. Carefully select RFP questions and set reasonable deadlines. Shippers structure a successful RFP when they align themselves with carriers that fit their shipping profile. Shippers should collect information on carriers' financial performance, customer service, IT quality and capabilities, exact fleet size, type of equipment used, and CSA scores. Carriers need a clear review period and realistic deadlines to assess their own capabilities, post questions, and provide detailed, effective RFP responses. Snap decisions can be costly to all parties.
58. Ship out of areas close to major cities. Metropolitan areas such as Chicago, Los Angeles, and Philadelphia have a substantial concentration of LTL trucking firms and terminals. Generally, the farther you are from urban areas, the more expensive your freight charges will be. The likelihood that your freight will be delayed also increases.
59. Consolidate orders. If you know you will have multiple orders going to the same location, try shipping them at the same time. Brokers can pass savings on to their customers when they ship multiple orders to the same general location, even if you cannot put them on one bill of lading (BOL). Standard common carriers sometimes bill customers on each BOL even if the freight is destined for the same place.
60. Be flexible on transit time. The more time you can give a carrier to move your product, the more money you'll save.
61. Evaluate flexibility. Transit times are important, but a carrier's ability to accommodate change is also essential. If you require late pickups or early delivery times, find out if the potential carrier can accommodate those requests. It also helps to prepare a list of questions about flexibility, such as: Can the trucker's workforce handle extraordinary requests? Can the carrier quickly assign staff and equipment to handle additional capacity?
62. Know the carriers and agents who are handling your shipments. Most LTL carriers do not serve the entire country. They "service" those areas outside the range of their own equipment by securing agents based in those areas. Make sure you know these agents and they know you. If your LTL carrier uses multiple terminals, get contact information and names of those people who are accountable at each facility.
63. Re-evaluate your dock procedures. Get your freight ready prior to the driver's arrival, and devote one or more dock doors to LTL pickups and deliveries. Coordinate a pickup system with your LTL provider to eliminate delays. LTL carriers assign multiple pickups to each driver, and sometimes instruct drivers to leave after 15 to 20 minutes with or without your freight. An efficient loading system means both parties come out ahead.
64. Supply well-written, universally adopted corporate routing guides. Routing guides optimize freight lanes and remove excess shipping costs. Best practices mean incorporating electronic shipment-level detail from all carriers and routing guide rules into a central database; treating the guide as a company-wide shipping mandate; employing weekly or daily shipment data imports; and cross-referencing shipment data against routing guide rules for reporting.
65. Agree on criteria for performance evaluation. Create a methodology and metrics explicitly stating your expectations, measuring effective carrier performance, and alerting both carriers and shippers if carriers are underperforming. Require your carriers to provide a monthly on-time service performance report. Ask that the report be segregated by lanes or states to identify problem areas.
66. Create a system for claims reporting. Do your carriers provide a monthly claims report to determine the number of claims filed and the amount of time claims stay open before resolution? Ask carriers for an exceptions report to measure the exceptions ratio against total shipments tendered.
67. Evaluate carrier service areas. Do your carriers have service centers in the primary states where your customers or vendors are located? Direct line movement of your goods by a single-line carrier eliminates handling, which reduces the claims risk and protects your pricing. Also consider standard service days. Ask each carrier's account representative for a service standards matrix or map, and use it to compare service commitments.
68. Understand carrier auditing processes. Auditing carrier invoices should be an ongoing process to ensure compliance to contracted pricing. Do the invoices match the contract and contain all the required data for processing by accounts payable? Many carriers have extensive weight and inspection staffs who reweigh shipments or look for improperly classified freight. While most of these revised charges are valid, some weight and inspection staffs can be overzealous and overlook contracted pricing, which creates unnecessary balance-due billing.
69. Demand equipment maintenance. Know if the trailers are clean and have been swept out before arriving to deliver or pick up your freight. Does the trailer have drainage to protect your freight from water damage? Is your freight picked up on a linehaul trailer and loaded to ride to destination, or is it transferred to another trailer before departing your local service center? Freight that is loaded to ride will require less handling, reducing the claims risk.
70. Monitor driver performance. Observe or consult with your dock personnel to learn if drivers use proper freight handling techniques. Do they have the right equipment to handle your freight? Do they throw your freight? Properly use a hand truck? Brace or stack your freight on the trailer? In addition, determine if drivers arrive on time for appointments or miss pickups. Are drivers courteous, treating your employees like they appreciate them as a customer? Many service center managers tell drivers that the customer is paying their wages.
71. When choosing a regional carrier, look for competitive transit times. Compare each carrier's service maps to see how many of your shipments they can deliver via next-day and second-day service. If, for example, the majority of your shipments move from Denver to the West Coast, determine what percentage of those shipments will be delivered overnight. Also check to see what lane improvements each carrier has in the works. Choose a carrier that can speed your delivery cycle as much as possible—and will stand behind its service commitment by offering a money-back guarantee.
72. Make sure customer service options are a priority. Ideally, carriers should offer more than one way for you to reach their customer service agents. Look for a carrier that offers several methods to contact its customer service department—through Web chats and text messages, for example. In addition, find out if the LTL carrier offers specially trained customer service agents who can answer questions about international shipping or special services you might require, such as distribution, consolidation, and truckload shipments.
73. Explore real-time technology. Real-time data is essential. Make sure the carrier you select offers real-time tracking technology and can provide shipment notification. Ask carriers to outline the technology they employ for every facet of their operation—from the dock to dispatch operations to drivers. In addition, find out how quickly they make pickup and delivery information available for each shipment.
to be continued...