6 Struggles a Shipper Faces and How to Overcome Them
Written by The Emerge Editorial Staff
1. Becoming The Shipper of Choice
So you have freight that desperately needs to get on the road but there’s a lack of capacity — we’ve all been there. After a flurry of phone calls and/or emails, the usual move is to resort to the spot market which means you’re paying higher rates and you’re probably not working with one of your usual providers. Thankfully, there’s a secret tactic you can use to reduce the number of loads that go to spot.
Emerge’s own Adrian Parkhideh, who previously handled operational functions for brands like Pepsi, Gatorade and Frito-Lay, reminds us that carriers look for the most attractive loads, and it’s not always payment or location based. According to Adrian, “the most successful shippers become the ‘Shipper of Choice’ for carriers.” So how do you do that? Adrian gave us the inside scoop.
To become the Shipper of Choice you want to be the most appealing, so you need to think like a carrier. If you have short wait and loading times, that’s a plus. If you have clean facilities with decent bathrooms, that’s a double plus. If you’re detailed and quick to respond to questions, always helpful and respectful to drivers, you’re on the A-list! Just remember, carriers make money by being on the road, so the easier you make it for them to get that odometer turning without jumping through hoops, the more likely they’ll pick your freight out of the bunch.
2. Lack of Technology
Yes, the T word! We know it instantly triggers feelings of being overwhelmed by learning something new and spending loads of money and time that you don’t have. The good news is that there is a wide variety of tools that are easy to learn, implement quickly without IT and even free. Not to brag, but our own Private Freight Marketplace just happens to be one of them!
Here’s the thing, if you’re relying on phone calls, endless emails and spreadsheets to manage your freight you’re not alone, but you could be soon. With competitors rapidly embracing technology allowing them to not only book and track freight faster than ever but also increase operational efficiencies through automation and data-driven insights, it might be time think about what it’s costing you to not try it.
Depending on your company’s needs, you may want to look into the following types of systems
- Transportation Management System (TMS)
- Warehouse Management System (WMS)
- Yard Management System (YMS)
And of course, the Private Freight Marketplace (PFM) by Emerge.
“the most successful shippers become the ‘Shipper of Choice’ for carriers.”
– Adrian Parkhideh
3. Consistent, Competitive Rates
Fuel prices are always fluctuating, usually pointing skyward. And broker fees can range from 15-25%. Combine this with the scarceness of capacity, and you’re in the middle of a perfect storm. So how do you navigate it?
Well, collaboration is the future. You want to communicate regularly with your carriers and brokers about what you both can do to keep costs down or at least more consistent — how can you help them help you? This not only makes you more appealing (as discussed at the beginning of this article) but it keeps your freight top of mind in a sea of choices.
You’ll also want to start utilizing an RFP (Request for Proposal). This document helps shippers define their needs and expectations of potential carriers who can help meet their goals and allows carriers to provide their rates based off of the provided details. While this is something most successful large shippers utilize, it’s a tool any shipper will benefit from. Since RPF’s can vary from shipper to shipper and can be quite detailed, we’ll give you the simple run down.
RFP’s are usually a spreadsheet with each of your lanes that need servicing on their own row. You’ll at least want to include columns for pickup and delivery zip codes, fuel surcharges, miles, equipment type, weight, commodity type and whether its FCFS (first come, first serve) or appointment. You’ll also want to make note of wait times, delivery windows, special handling requirements, etc. Providing deeper details that help carriers provide the most accurate quotes will be heavily appreciated, in turn, helping to foster long-term relationships with your go-to providers.
Once that’s complete, send it out to every carrier and broker you can think of. From there, go through your responses and add the providers you like to your route guide. Check out our article on How To Hire The Right Carrier for some useful tips to make sure they’re a good fit.
Best practice is to review and renew your RFP at least every year, however, it’s more proactive to update quarterly.
A lot of shippers have better visibility on their Friday pizza delivery than they do on their thousands of dollars worth of freight traveling cross-country. Based on our sage advice in #2 of this article, we know you’re already researching tech solutions that will undoubtedly also improve visibility, so here’s something you can do in the meantime.
While it will be a bit of a manual process, the answer is quite simple. Set up requirements with all of your brokers and carriers to notify you of any issues regarding in and out times, tracking in transit difficulties or any unexpected updates along the way. Of course, this requires cooperation from your providers, so if they’re not willing to play along it might be time to look elsewhere. Our previously mentioned article on How to Hire the Right Carrier is a great resource to connect with reliable providers.
5. Insight Into Buying Behavior on Spot/Last Minute Loads
At the beginning of this article we mentioned a tactic to avoid the spot market by becoming the “Shipper of Choice.” But as we all know, if you have a short deadline, unexpected supplier snags, weather delays or even unplanned order increases, the spot market becomes a necessity.
Since the spot market is traditionally the last resort to get your freight on the road at nearly any cost, most shippers worry more about the delivery completion than the overall cost to get it there. With the freight now costing more to transport, that cost is either absorbed by your company or passed on to your customers. But, just remember, most things can be improved with analysis.
It’s time to find out if your transportation coordinators have the right tools and connections to make the best decision for your company and the delivery. You’ll want to make sure your coordinator is able to quickly find out if a price is fair and in line with current trends or if it’s being unfairly increased during a crisis.
While current 3PL (as long as they are a trusted partner) can help provide insight, a faster and wider-reaching approach is to use our Spot Bid Protection and Spot Management solutions within our Private Freight Marketplace (PFM). Our Spot Management solution provides valuable insights into your buying activities, empowering your team to make decisions based on real-time data. Additionally, when your go-to carriers aren’t available to cover your load, our Spot Protection solution will step in to aggressively seek out and present rates from our verified carrier network, helping your team avoid paying spot rates altogether.
6. Hedging Your Bets
When the market is soft, many companies make the mistake of assuming rates are going to stay that way for the foreseeable future. But, If we look at flooding, hurricanes and polar vortexes during the last few years, history demonstrates the inevitability of future rate hikes brought on by natural disasters. And remember, you can’t always blame it on the weather. Think about union strikes, business closures and other industry events that influence rates and available capacity.
Have your operations team or supply chain planners forecasted potential events and put together plans for when these occurrences take place? And have they been tried and tested? If not, a great idea is to have a tool or another trusted partner in your back pocket to help so you’re not scrambling when prices skyrocket and capacity is limited.
Tools like the Private Freight Marketplace are a great way to save whether the market is soft or not. Being able to access more quotes from more providers, especially carrier-direct pricing, puts the power of choice back in your hand. We’d love the opportunity to discuss getting you prepped to save throughout the year no matter the state of the market. Let’s get the conversation started!
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