The building blocks for better carrier-shipper relationships

At its best, the carrier-shipper relationship is a close collaboration, with both parties working to build shared priorities around getting freight delivered on time and in one piece. But this ideal is not always realized, and carriers and shippers often remain at odds with one another. How can carriers strategically approach relationship-building with their customers? What does true collaboration look like in LTL?

A recent session of the LTL Business Analytics course addressed these questions, bringing in Jason Bergman, CEO at Access Global Logistics, and Kevin Huntsman, President at Mastio & Co., to provide expert insight. To build better relationships with shippers, carriers need to leverage better communication skills and data, as well as understand the generational changes coming around the bend.

Good communication as a cornerstone

Great collaboration between carriers and shippers does not happen by chance. It’s earned through intentional communication and trust.

While shippers must clearly articulate their expectations and challenges, carriers need to reciprocate this transparency by providing insights into their operational needs and constraints. This mutual transparency can prevent the surprises (reinvoicing and fees, for example) that too often disrupt relationships.

What disrupts a relationship is when there are surprises—when there’s something unexpected,” Bergman said.

While communication should be natural and organic, it shouldn’t necessarily be ad hoc. Carriers need regular channels through which to check in with their customers, such as monthly or quarterly business reviews, allowing them to keep their strategies aligned and move from reactive to proactive modes of functioning.

Huntsman also highlighted the importance of drivers in fostering trust, as they serve as the primary point of contact between an account and a carrier. While shippers may see their account reps regularly, they see their drivers daily, and those drivers become the face of the carrier more so than any other representative. Leveraging this proximity and familiarity can be a powerful way to build stronger shipper-carrier relationships.

The importance of data

Friction between shippers and carriers typically amounts to misunderstandings and miscommunication. For example, if a shipper lists dimensions in the bill of lading that contradict a carrier’s dimensioner, it will often redound to unexpected fees for the shipper, which can hurt the relationship. On both sides, leveraging data tools and other technology to improve accuracy and eliminate surprises can help prevent friction.

Tools like scorecards—objective and data-driven—help carriers and shippers build a shared basis for performance and pinpoint areas for improvement.

“The scorecard is incredibly important because it’s like Switzerland,” Bergman said, “it doesn’t take sides. It doesn’t have loyalty to anyone.”

While scorecards can sometimes comprise a large grab bag of KPIs, panelists recommended whittling the focus down to three to five that truly matter to both parties. These could include on-time delivery rates, damage claims, or weight accuracy. By concentrating on these primary metrics, carriers and shippers can avoid diluting their focus. More than specific KPIs however, Bergman and Huntsman both emphasized that they should be developed collaboratively between shippers and carriers, resulting in a shared set of priorities.

“In most situations, a scorecard is pushed down to the carrier from the customer saying, ‘This is how I am going to measure you’,” said Bergman. “But the most successful KPI measurements are when the carrier and the customer work together to establish them.”

An upcoming generational shift

Panelists remarked on a growing receptivity to using data and technology to improve carrier-shipper relationships. This willingness stems in some part from demographic shifts in logistics as baby boomers—using established, manual workflows—exit the industry and more tech-savvy generations take on leadership roles. With this transition comes fresh opportunities: The new generation, having grown up with technology, is well-equipped to leverage data.

“The benefit with the new generation is this technology is all they know,” said Bergman. “They’ve worked with devices their whole life. They understand how to use data, they understand how to share data, and they understand how to access it.”

But the picture isn’t entirely rosy. While tech-savvy can be helpful in increasing accuracy, younger generations lack the institutional knowledge acquired by the previous generation and, at times, are short on the communication skills that come from years of hands-on experience.

“One thing I would tell younger people who are coming into this industry is that logistics was built by networking,” said Huntsman.

Although younger workers are great at data-driven decision-making, what’s also needed is a contextual understanding of LTL’s complex history—for example, the impact of deregulation on today’s operations. What’s needed to bridge this gap is institutional knowledge-sharing through mentorship and training programs.

Looking ahead

The session concluded with a final call for better communication. Only through a more refined habit of communication can shippers and carriers overcome mutual mistrust to build a better culture of collaboration. While data and new tech can help with this, it’s less about technical solutions and more about understanding—of both your capabilities as a carrier and what your shoppers need.

“Trust doesn’t come overnight,” said Bergman. “It has to be built.”