Shippers Say Key Factors Are Timely Delivery, Status Updates and Dependable Relationships
This story appears in the Oct. 3 print edition of Transport Topics.
CHICAGO — Shipper representatives speaking at the McLeod Software User’s Conference 2011 here last week said the most important things a carrier should do are to be on time, provide delivery status and maintain dependable relationships.
For example, because most products shipped by Tyson Foods Inc. are highly perishable, the carriers that do business with the company know on-time delivery is critical and transit updates are crucial, said Larry Keene, director of transportation at the Springdale, Ark., chicken, beef and pork processor.
“My biggest issue is that carriers do not understand the concept of dependable relationships,” said David Ban, transportation analyst for Packaging Corp. of America, a Lake Forest, Ill., producer of corrugated boxes. He said some motor carriers will sign on and then change their rates because of market fluctuations, believing they can command a higher rate.
This is why PCA prefers long-term carrier relationships and truckers willing to dedicate equipment and resources and adhere to contract terms, Ban said. “We want people who are fully engaged and we want carriers who are going to ensure that the contract is followed.”
When motor carriers are in a long-term relationship with shippers, it’s just easier to cooperate on matters that benefit both parties, Ban said.
For example, he said PCA has a deal with an unnamed trucker that picks up waste paper from retailers that include Wal-Mart Stores Inc., Home Depot Inc. and Lowes Cos.
Normally, the carrier’s drivers would have to wait an hour to be unloaded when they delivered the waste paper shipments and then another hour to be re-loaded for the outbound leg. But a mutual drop-and-hook agreement allows this carrier’s drivers to drop their loads and hook their tractors up to newly loaded trailers, and they’re under way in just 45 minutes.
“We get the guaranteed equipment and the capacity and he gets have his drivers out on time,” Ban said.
But cooperation such as this works only when a shipper and a carrier dedicate resources to make the relationship work, he explained.
Close relationships is why Tyson is willing to look at the extra costs of its carriers, particularly when it comes to detention, which forces trucking companies to pay extra to drivers when they’re forced to wait at shippers’ facilities. “If you do a good job, we will talk about detention,” Keene said. “We want to take care of your expenses.” But Keene said Tyson will demand detention documentation from truckers which it then will show its suppliers to demonstrate there’s a log jam in the system.
Unlike a lot of traffic professionals, Ban, who manages about 60 trucking companies, leans towards employing smaller and mid-size carriers that operate between 100 and 400 trucks. “Whenever you’re having a major problem or issues with a mid-size carrier, you get to talk to the owner and he’s the final word,” Ban said. “If you’re dealing with a large carrier, you’ll probably talk to a sales rep who may have to ask someone else for an answer.”
Ban also said his main peeve with larger carriers is that when he asks for a rate, it may take two or three days to get a reply. He also complained that many large carriers constantly rebid on rates, sometimes as often as every five months. That is why following a contract is a major requirement of his, he said.
Tyson also insists on motor carriers having the ability to communicate delivery status so the company knows of potential delays and other shipping problems. Knowing delivery status is particularly important during the holiday season when retailers are clamoring for its food shipments, Keene said.
But it’s not necessarily a deal killer. Recognizing the costs of implementing such systems, Tyson allows carriers without this equipment to log on to the Arkansas company’s own transportation management system so truckers can input the locations of their rigs.
PCA makes no communications demand of its carriers, according to Ban. However, the company monitors its carriers’ delivery performances. “As long as you’re doing better than the average carrier, then you’re doing a good job for us,” Ban said.
Tyson also wants to be apprised of carriers’ long-term strategic plans, Keene said.
Tyson has been in business for 76 years and, because it’s a family-owned company, there’s little doubt who’ll be running the company in years to come, Keene said. And while he noted many successful truckers are good businessmen, he wonders what the succession plan is for their companies. “We need to be comfortable that they’re going to be here to provide for us in the future,” he told conferees.