Have you ever heard the phrase, “You get what you get, and you don’t pitch a fit”?
Frequently used in elementary schools, it’s designed to shut down picky behaviors and objections before they start.
Over the past few years, many shippers have probably felt like they’ve been engaged in a similar situation with LTL carriers, thanks to a tight market that has put carriers firmly in the drivers’ seat in terms of price and service.
But thankfully, much like the Bob Dylan song, “these times they are a-changing.”
In recent months the longtime capacity crunch has started to lighten up, and shippers have begun regaining the ability to expect more than just an “it got there” standard of quality.
As a result, it’s an ideal time to hit the reset button on your LTL carrier measurement practices – and to consider broadening the way you approach several common, but potentially deal-breaking metrics like the following.
What’s each carrier’s on-time delivery percentage?
We can almost hear you saying, “Well duh!” But hear us out: Although this is clearly the most obvious LTL metric that your company should be monitoring, that doesn’t necessarily mean you’re watching it as thoroughly as you should be.
For example, are you merely looking at each carrier’s on-time ratio as a whole? Are you also taking the time to drill down and examine that performance on a lane-by-lane basis?
Have you been keeping track of how each carrier’s on-time performance has improved over the past year? Or would you be hard-pressed to say which of your carriers are making progress?
Furthermore, can you confidently say you know how each of your carriers’ on-time percentages compares to the current industry average – or to the on-time percentages of other carriers that you’re not currently shipping with?
The more granular you can be, the more likely you are to receive better delivery reliability as market conditions improve.
How often does each of your carriers lose or damage your freight?
At some point even the best LTL carriers will occasionally misplace or damage some of your freight.
The question is, how often do these losses and damages occur relative to the number and size of shipments you book with each particular carrier – and is that damage ratio greater than, equal to or less than what you’re experiencing with your other carriers and the industry average for your type of products?
Just as important, what seems to be the primary cause of these losses and damages? Does it appear that most of them are minor and incidental? Or do detailed inspections reveal that your freight might have been tossed hither and yon like the singer’s guitar in that famous United video?
And here’s the kicker: How much do each of your carriers seem to care about making things right? Is filing a claim and getting a refund fairly easy and straightforward? Or is it a cumbersome process that requires multiple interactions and follow-ups – and many weeks or months of frustration?
These kinds of things are super-important to know, because in today’s time-challenged supply chain, you and your company have better things to do than re-shipping freight, dealing with disgruntled customers and bird-dogging refunds.
Who are your carriers of choice? And which carriers are on your company’s no-call list?
Although many companies say they rely strictly on tangibles to choose and measure their LTL carriers, the truth is most shippers also place a strong emphasis on intangibles such as whether or not they like doing business with a particular carrier.
While this can indeed be a relevant metric, it’s super-important to look more closely into why any of your strong likes or dislikes exist – and how long they’ve been in place.
For example, are the negative biases you have based on a pattern of major lapses that happened all across your network? Or are they based on a handful of random exceptions or minor conflicts that occurred between just a few people?
Is it the above-and-beyond service or pricing that initially made a particular LTL carriers one of your carriers of choice still in play? Or has it perhaps slowly tapered off as market conditions have changed?
For that matter do the key players who contributed to your original positive or negative biases still work in the same roles? Or have they perhaps moved on to other companies or departments?
Ultimately you may discover that your preferences are still merited and that there’s no harm in applying them to your carrier management program for now. But in most cases, you’ll probably discover that they’re based on isolated incidents or experiences that happened so many years ago that they should be ancient history.
But wait. There’s more!
Obviously there’s far more to this discussion. For example, we haven’t even had a chance to cover questions like:
- How accurate is each carrier’s invoicing?
- Does each carrier have a website that makes it easy to tender freight?
- What kinds of investments are each carrier making in terms of its future capacity or service levels?
- And does each carrier’s pricing activity seem to be fair and above-board?
Nor have we been able to address the concept of corporate chemistry – aka the reality that sometimes certain companies and carriers simply click and work together better than others.
But for now, suffice it to say that unlike those hapless elementary schoolers and their dubious prizes, you do have the right to examine and evaluate what you’re really getting each time you give an LTL carrier your business. And AFS is here to help. As a carrier-agnostic 3PL, we manage and measure $1.2 billion worth of LTL spend on behalf of numerous clients, and we’d be happy to weigh in on the particulars of yours. Drop us a line at [email protected].
