By Ronald Marx
This Opinion piece appears in the Feb. 14 print edition of Transport Topics. Click here to subscribe today.
The recession that began in 2008 was the deepest since the Great Depression of the 1930s. As that recession continues to abate, the trucking industry faces rapid changes and a shortage of qualified drivers. During this transition time, trucking customers must be proactive, rather than passive spectators. For them, selecting the right trucker to move their freight is a critical imperative.
The carrier responsible for a shipment, whether it’s a full truckload or less-than-truckload haul, has an enormous responsibility. How that company moves a shipper’s freight not only means the difference between a satisfied customer and an unhappy one, but also between effective distribution of products or careless, wasteful handling of them.
For shippers, ultimately, their choice of carrier will be translated either into greater company profitability — or a balance sheet splattered with red ink.
I speak from experience as a trucker who for many years has sat across the table from many shippers, ranging in size from large, multinational companies to small, local businesses. I have found there are distinct parameters in negotiations that, if adhered to, will benefit both the shipper and the carrier.
If you are a shipper, the following guidelines are for you. If you sit on the other side of the table and run a trucking operation, use them to acquaint you and your employees with what your customers want from a carrier, making sure that, when you negotiate with a shipper, all the important points are covered.
As a shipper entering negotiations with a trucking firm, begin by analyzing your own transportation procedures and determining your requirements. Ask yourself these questions:
• I’ve used trucking in the past. What was the rationale for using these road warriors, and are those reasons still pertinent?
• How many shipments will the carrier be handling?
• Will these shipments be full truckload or less-than-truckload?
• Do my shipments primarily move short distances or across the continent?
• Does my freight consist of high-density or lightweight cargo?
Don’t leave negotiations solely in the hands of your traffic managers, competent as they may be. Draw on the knowledge and expertise of other departments in your company, such as finance, marketing, purchasing and information technology. Involve key executives in these negotiations to determine senior-level priorities.
Be clear in your own mind whether the most important factor in moving your freight is cost or level of service.
When you request a proposal from a motor carrier, insist on clear, precise language outlining the company’s services with no vague generalities. In return, be clear about what you expect from the carrier. The better-defined your initial requirements are, the more clear and comprehensive will be the carrier’s response.
You’ll need to know about:
• The trucking firm’s physical facilities.
• Does the company own or lease terminals — or operate out of a parking lot?
• How extensive are the carrier’s facilities?
• Are they at sites reasonably close to your consignees?
• Are the facilities owned and operated by the carrier, are they franchises or are they run by independent agents or brokers?
While technology plays an ever-increasing role in the entire logistics industry, the quality of people who will handle your business remains the most important factor in ensuring the success of the customer-carrier relationship. With that in mind, ask:
• Does the carrier have a skilled, experienced workforce able not only to move scheduled shipments in an efficient, reliable manner but also to respond with a cool head and clear judgment to emergencies?
• How many of your motor carrier’s personnel will be dedicated to moving your freight? How many will be dealing directly with your company, and how many will be support people?
• Where will they be located?
• Does the prospective trucking company have procedures and processes to learn more about your business?
• How much of their time will be devoted to you, as opposed to the other shippers on their customer list?
• In what manner and how often will they communicate with your traffic department and other pertinent sections of your business?
• Does your carrier have the ability to trace your shipment at any given time and report that information back to you quickly, accurately and without too much logistical jargon?
Signatures on a contract are only the starting point of a complex but potentially satisfying relationship with a key vendor. Don’t let grass grow under your feet before implementing your new carrier/shipper alliance. Have your pertinent people meet with theirs at the earliest opportunity. Thoroughly discuss processes and procedures detailed in a new agreement. Develop a realistic schedule clearly defining implementation steps and responsibilities. Circulate this schedule to senior and middle management for their evaluation and comments.
Ours is an increasingly complicated and litigious society. If you are a shipper, choosing the right motor carrier will allow you to focus your attention on running your own organization without having to concentrate on the gritty business of over-the-road hauling. And if you operate a motor carrier, share these guidelines with your existing customers — and the ones you’d like to add to your customer list.
Skyline Freight, Jamaica, N.Y., is the trucking division of Express Air Freight Unlimited. With facilities throughout the United States and China, Express Air Freight handles surface, air and sea freight, both domestically and internationally.