The Importance of Data in Managing Carrier Relationships

carrier relationshipsStrong partnerships between carriers and shippers are critical for freight operations to run smoothly and cost effectively. When shippers and carriers work together as a team, a win-win partnership is created that leads to continuous improvement in logistics efficiency and customer service. This all sounds good, but unfortunately the traditional method of the carrier salesperson bringing donuts on a Monday morning does little to ensure a good service relationship. Real partnerships take effort and hard work to first establish trust. Frankly, good relationships are built on accountability. Shippers need to respect the carriers’ business; follow through on opportunities, not keep them waiting for hours to unload their trucks and months to pay invoices. For the shipper, effectively managing their carrier relationships comes down to technology.

Shippers must implement a capable Transportation Management System (TMS) that will be able to rate, book and track all modes of shipments, as well as enable quick communication and connectivity with carriers. Most importantly, the TMS must gather transactional information between supply chain trading partners to provide high levels of visibility into what is going on within the supply chain and the performance of their carriers.

Information provides an opportunity to drive accountability. Shippers need to see the history of the shipping transactions to understand what they are paying in each lane, timeliness and consistency of pickups, accuracy of invoicing and the overall level of service they can rely upon with their carriers. Each carrier needs to be benchmarked against one another to establish a minimum level of acceptable service.

Logistics managers need tools to manage their relationships. In today’s business world, it is expected that sales people will manage their relationships with their customers in a customer relationship management system (CRM) keeping track of all of their interactions, events and next steps. Why shouldn’t freight and logistics managers have the same type of tools managing business relationships that can cost their company hundreds of thousands of dollars every year?  Certainly, keeping track of meetings in spreadsheets, notebooks or perhaps scraps of paper are not a good idea in 2017. Shippers need their own CRM to maintain a history of every conversation and set of actions from their history of meetings. This will help the logistics manager to be organized and prepared for their next engagement with carriers with a game plan to get the best level of service for their company

Most importantly, shippers must have analytics at their fingertips in the form of Carrier Scorecards generated from the fact-based metrics captured by the TMS. This will empower management to make sound decisions and present information to the carrier that can reward or improve their behavior based on results.

Carrier scorecards should address the following areas:

  • On-time delivery performance
  • Billing accuracy and quick resolution of discrepancies
  • Monitoring damages and handling claims
  • Load acceptance and denials
  • Accessorials as percent of total freight
  • Spend per carrier, per lane, per mode

Sitting down with carriers without the facts will lead to a series of anecdotes that are hard to substantiate as a pattern. How can you deal with a price increase request without the analysis of the real data? Also, once the carrier has a true picture of their performance and how they stack up against the competition, they have the information they need to work with their team to improve their service and gain additional business. An improvement plan should be designed and continually measured and analyzed. By monitoring performance backed by reliable, fact-based analysis, carriers and shippers can build and maintain a win-win partnership for smoother operations and better performance.

Continual communication and feedback will keep the relationship running smoothly. Open communication based on the facts will build trust. Integrity and respect will keep the relationship strong, even in times of peak stress periods for the business. Understanding and respecting the value that each party brings to the relationship will make the partnership grow stronger. Carriers will have the opportunity to run their business more efficiently and shippers will have the power of information to achieve higher levels of efficiency in their freight operations.

Dan Clark, Kuebix Founder and President, is a freight industry technology innovator. He possesses extensive experience gained from years of working with leading freight carriers and multibillion-dollar companies. Kuebix offers a transportation management system (TMS) that delivers true freight intelligence empowering companies to capitalize on supply chain opportunities through visibility, collaboration and predictive analytics. Dan is a passionate thought leader on how technology is revolutionizing the logistics industry. You can read his unobstructed view of supply chain logistics in his blog “Supply Chain 20/20.”