A friend refers the blind date to you.
You accept based on their recommendation.
You hope they made a good personality match.
But as we know, most blind dates don’t lead to marriage. Your well-intentioned friend made their recommendation on circumstantial evidence. But what if you had statistical proof a blind date—or in this analogy—a carrier was a perfect match for your company?
Connecting to a global trade network for an RFP is like signing up for a match-making service. The network has all of your company’s must-haves for a good carrier match. It also has a statistical scorecard of every single carrier in the network, which provides their strengths and weaknesses. Using actionable intelligence, the global trade network can provide you with a list of new carriers that align well to your business needs. This allows you to strategically cast a wider net when inviting carriers to your RFP.
For this match-making to work effectively, it’s important you create a carrier strategy that supports your transportation strategy, and therefore, the supply chain strategy. You want to establish several key performance indicators based on your business needs to judge carrier performance. Here are three to consider:
- Service Requirements – Every company wants to maintain a high customer satisfaction rating, and getting product to the stores on time is key to that success. Establish company goals for areas such as load tender acceptance, on-time pick-up, on-time delivery, and stock move deliveries.
- Equipment Requirements – What type of equipment does a carrier need to move your product and what are your volume requirements? This is critical information when moving fresh and frozen product.
- Lane Requirements – What is your strategy for your high-volume lanes? Do you want to focus on reducing rates, increasing performance, or achieving more capacity?
There are several key metrics the Global Trade Network identifies in a carrier scorecard. Here are the top four:
- Tender Acceptance – This is one of the critical metrics from a budget standpoint, since most budgets are based on primary carrier acceptance with only a little leeway to account for secondary acceptance and the higher associated rates. Costs often climb as tender falls further down the routing kind. Tender acceptance is the key indicator of your carriers fulfilling their commitment to you.
- Give Backs – When a carrier accepts a load, what percent of your loads do they give back? If this happens, it typically puts you in a position to spend more money, due to the last-minute nature of the situation, while also increasing the chance that the load will fail, regardless of what you pay.
- Load Expirations – You obviously want your carriers to accept your loads, but if they cannot, it is better for them to reject those loads in a timely manner than allow them to expire. Expired loads only add time to the overall tender process.
- Claims Ratio – Do some carriers have more associated claims than others in the GTN?
Your match-making service, aka a global trade network, can provide a list of the best matches based on the two columns of qualifying information. Now you have some new carrier options to consider as you enter into your next RFP. Being a part of a global trade network also helps you mitigate supply chain risk by giving you continuous access to multiple delivery options and carrier choices, and preempting disruptions through better carrier visibility and management.
When it’s time for your next RFP, ask yourself if you want to go on a blind date or trust in a mathematical match-up to find new opportunities that align to your company’s must-haves for supply chain success.
Tim Dalton is Senior Manager, Procurement Services at BluJay Solutions. Tim is responsible for the management, support, and/or execution of all transportation procurement activity. Tim has 15 years of experience in supply chain. He joined BluJay Solutions in 2005, and has held several leadership positions with increasing responsibility, including Logistics Manager and Account Manager.