How do LTL shippers and carriers create strong relationships amid the pandemic?
Authored by SMC³ on September 23, 2020
Capacity is an omnipresent concern for shippers. Though LTL capacity has ebbs and flows, finding the right freight transportation carrier for the job, at the right price point, is an ongoing issue. To a large extent, the coronavirus pandemic has made finding and securing LTL capacity with carriers significantly more difficult. Shippers may also be shopping around for new transportation providers, looking to save money. But saving money on freight transportation should not be the overriding factor when looking for a new partner.
During SMC³’s LTL online supply chain education course, students learned from supply chain leaders how shippers can best work together with carriers to find common freight transportation ground during challenging times.
Generate impeccable logistics data
Southeastern Freight Line’s director of pricing, Clete Cordero, sees the data shippers provide to carriers as the first step in a successful relationship. Making sure all data exchanged is accurate and complete is extremely important; providing accurate data and classification of freight means that the carrier can offer the best price and the shipper doesn’t find any billing surprises down the road. If a shipper submits incomplete data with their bid, Southeastern might not even price it.
“We get a good amount of bids for new business,” he said. “If we price something, and what we end up handling is not what was priced, it’s routine that we will go back and ask for a change in price. Probably our biggest difficulty is making sure we have the right information to cost with.”
Work toward supply chain transparency
Trust is also a key component of any strong shipper-carrier relationship. Shippers have to trust that their carrier partners are providing them with a market price for the agreed upon services, and carriers need to trust that investing in a shipper’s business will lead to sustained success for both parties.
“If we have a customer that every year they’re going to rebid their freight, and they try to go with the lowest cost carrier, and they’re apt to change their business model every year, at Southeastern we really shy away from those accounts,” he said.
In March and April, as the coronavirus pandemic worsened and the economy entered a downturn, Cordero started fielding a number of bids from shippers that were looking to save money. Capacity started to tighten around the industry, and Southeastern Freight had to implement safeguards for new business.
While carriers don’t like to turn down good freight, many found they had to cut off bidding and go to customers with an odd explanation: Although the capacity was there, additional freight can’t be added while still providing the same level of service to their customers. This summer, Southeastern implemented a rule that they couldn’t take on a new account without a 30-day notice.
Champion transportation collaboration
Service is at the heart of the shipper-carrier relationship, according to Webb Estes of Estes Express. Instead of focusing entirely on price savings, shippers should ask carriers, “Do you have the capacity to give me the service that I need?” Carriers, in turn, need to be honest with themselves.
Technology also helps create a tighter bond between shipper and carrier. Estes Express is busy working on providing visibility services to all its shippers, giving them a more transparent look at the supply chain.
Estes sees most demand for exception-based visibility notifications. Shippers are really looking to visibility as a way for them to see if a shipment’s been delayed, not as a tool to uncover real-time routing data for every single shipment, although they can do that as well.
“It is something we’re spending a lot of time on right now because it’s a cool new tool for customers,” he said. “We’re right now rolling out ETAs and ‘stops away,’ so we’re telling customers it’s out for delivery and this is the time of day that we think it’s going to show up. It’s a big topic for a lot of customers.”
How can SMC³ foster a lasting relationship among shippers and carriers? For an in-depth look into SMC³’s bidding tool Bid$ense, explore the white paper “Reinventing the freight transportation RFP process.” Ready to see SMC³’s Bid$ense in action? Take the demo.
Interested in mastering LTL operations concepts? Sign up for an exclusive supply chain education offering of SMC³’s LTL 202 “LTL Operations from Dock to Stock” featuring live speakers from companies around the supply chain. Register by October 22 for a 25-percent discount on the registration fee.