Working with Transportation & Logistics Companies

Companies loathe spending money on freight, unless, of course, the shipment is late. When that happens, firms will eagerly spend two, three, or four times what they normally would to ship on time. With so much at stake like customer service issues and freight spend, what is the best way to work with your transportation & logistics suppliers? The answer is simple, communicate frequently and be a good customer.

The Basics of A Good Working Relationship

Transportation is a volatile business with fluctuating costs like fuel, built on a dynamic network of national supply and demand characteristics. Most carriers now implement a routine fuel surcharge to insulate their own cost from fluctuating fuel prices. This is hard, however, for most shippers to pass on in the same neat and timely manner. So you absorb the increases over time and raise your prices when you can. Use this fact to remind your logistics providers that you can't take on price increases on the base rates while you are also absorbing all the fluctuations in fuel costs.

Other ways to remind logistics suppliers about price control include quote requests. Every time you have a shipment you are entitled to a rate quote. Now some shippers have contracts which hold the pricing for a period of time. If you are under contract, you can still press the point by asking for the current fuel surcharge.
If your broker or transportation vendor provides you with truckload, rail, or ocean freight quotes, you will most certainly need new pricing for every move. Unlike common carrier less-than-truckload freight, large containers and trailers can offer spot pricing deals based on how goods are moving across the country. If you work with a savvy transportation company, they can help you take advantage of these specials.

Software has improved the transportation professional's ability to book and track freight. Sometimes, however, what is apparent to your vendor is not apparent to you. Keep in touch and ask for updates frequently. Again, outside factors like breakdowns or weather can impact the schedule and you want to know this before your customer calls looking for a late load.

Communication is Key

Staying in touch with your logistics provider also helps you ship efficiently. Running the dock schedule is important to profit, customer service, and even product damage. If you are expecting to load a 53' rail container at 10am and the driver doesn't show until 2pm then it has cost you time and space. Often, inefficient use of space turns into damaged goods or shipment errors.

How you communicate is important too. Some shippers prefer email for convenience. But you can't be too reluctant to pick up the phone; conversations can reveal important details and provide the opportunity to apply some pressure, when necessary.

Most businesses spent over 10% of their sales dollars on transportation so it is well worth paying attention to how you ship and receive your products. If you don't have someone already assigned to this important task, make someone responsible. And once they are in that role, teach them to work closely with your transportation suppliers because your business relies upon it.