When it comes to logistics, almost nothing is more critical than picking the correct shipping partner. Imagine how much weight that statement carries in freight transport, where various challenges and complexities necessitate more significant quality and assistance.
Opting for the wrong LTL carriers can be a make-or-break in any segment. However, in a freight transport situation, there are much higher stakes. Just one slip-up in transit could mean expensive damage, late arrivals, and unsatisfied customers. It’s essential to get an experienced transporter.
In this blog, we will unveil the concept of being a shipper of choice while providing a much-needed understanding of the necessity of choosing the appropriate transporter, especially for less-than-truckload (LTL) shipping.
FIRST THINGS FIRST: KEY DIFFERENCES BETWEEN LTL AND FTL
LTL shipping and full truckload (FTL) shipping are two main types of freight shipments. Each suits different shipping needs. LTL shipping refers to shipments that are too small to fill an entire trailer. Essentially, many shipments from different shippers are consolidated on one truck, and each shipment that is part of the consolidation only takes up a part of the trailer. LTL shipments typically range from 150 to 15,000 pounds. Alternatively, FTL shipping comprises the transportation of a consignment that occupies the entire trailer capacity, requiring a full trailer dedicated to only one shipper.
Comparison of Typical Shipment Size and Cost Structure
There are some apparent differences when comparing the typical size of shipments and the cost structure of LTL and FTL. LTL shipping is meant for smaller shipments, and costs are distributed among shippers since multiple shippers share a single trailer. Due to this, LTL shipping is generally more cost-effective for small- to medium-sized freight. The cost of LTL shipping is typically based on the weight, dimensions, distance, freight class, and additional services.
FTL shipping is better for larger loads that can fill a whole truck. The pricing structure for FTL is usually more expensive than that for LTL because the cost is for the entire truck, whether or not the shipment fills the car. Mileage, type of freight, fuel surcharge, and special handling needs can influence FTL rates. Although LTL is the more efficient option for smaller loads, FTL is the better value for larger loads because it is a flat price for the space used in the truck.
Scenarios Where One Option is More Suitable Than Another
The applicability of LTL shipping versus FTL shipping depends on many factors, including the shipment size, the freight’s delivery time frame, and the type of cargo being shipped. LTL shipping is best suited for businesses with occasional shipments and some flexibility on transit time. Whenever the delivery timetable isn’t pressing, multiple shipments can be consolidated and load planning improved.
CURRENT CHALLENGES IN THE LTL INDUSTRY
The rise of e-commerce has had a significant impact on the LTL industry. Customers want fast delivery times, driving e-commerce retailers to use LTL for small, frequent shipments. These trends require LTL carriers to increase efficiency, accuracy, and flexibility to meet dynamic demand. The shift to e-commerce has also led to higher expectations for track and trace, requiring LTL carriers to improve their technologies and services.
Driver Shortage and Turnover
There is a shortage of drivers, and the turnover rate is high. Aging drivers and a shortage of newcomers exacerbate the problem. High turnover will affect the reliability of the service and increase operating costs for employees who will need to invest more in recruitment, training, and retention activities. Meeting this challenge should provide competitive prices and improve driver performance and job satisfaction.
Regulatory Changes and Compliance
The LTL industry must adjust to many constantly changing regulations for safety standards, emissions controls, hours of service regulations, and more. Staying compliant with all these rules requires constant attention from LTL carriers. New regulatory changes can bring on added expenses and adjustments in operation, impacting the efficiency of today’s or tomorrow’s profits. Keeping up with and adapting to these changes is essential for guaranteeing compliance with the law and maintaining operational integrity.
WHAT EXACTLY IS A SHIPPER OF CHOICE?
A “shipper of choice” is a term used in the logistics and transportation industry to describe a shipper that carriers prefer to work with. Being a shipper of choice means a company has established practices that make it more attractive to LTL carriers, often resulting in prioritized service, better rates, and more reliable transportation solutions.
WHY TO BECOME A SHIPPER OF CHOICE?
Establishing yourself as a shipper of choice provides substantial benefits in securing capacity, fostering healthy relationships, and obtaining favorable rates. Amid tough competition and volatile market conditions, winning over carriers becomes paramount.
Gone are the days when huge volumes and routine shipments were enough to entice carriers. Modern carriers examine complex details involving organizational acumen, technological prowess, and interpersonal skills. Let us explain five compelling reasons illustrating the immense impact of achieving shipper of choice status:
#1. Guaranteed capacity during peak hours: Ensuring prime capacity during peak times proves challenging due to increased demand and limited resources. Demonstrating commitment to the shipper of choice standards guarantees the loyalty of a specialist carrier, thereby increasing your chances of taking the capacity you are looking for.
#2. Reduce volatility through collaboration: Market volatility constantly threatens profit margins and operational efficiency. Building solid relationships with carriers strengthens your bargaining power and insulates against unpredictable pricing trends, providing better control over your logistics footprint.
#3. Optimize your cost structure: Negotiating discounted rates is a tangible benefit derived from your revered status, leading to direct savings. More important, though, is the opportunity to capture hidden value through reduced administrative overhead, reduced claims ratios, and increased asset utilization.
#4. Accelerate solutions through tighter connections: Unforeseen events inevitably disrupt supply chains and require immediate attention and decisive action. With influential relationships, you can bypass bureaucratic red tape, accelerate solutions, preserve rare momentum, and avert undue losses.
#5. Establishing your industry position: Finally, establishing your company as a model of virtuous behavior skyrockets your brand value. Gaining the admiration and respect of peers, competitors, and regulators positions your business favorably into the broader community and opens the door to mutually beneficial ventures and fruitful collaborations.
THE SIGNIFICANCE OF RELATIONSHIPS WITH LTL CARRIERS
It is essential to become a shipper of choice and cultivate good relationships with LTL carriers. These relationships are based on trust, dependability, and consistent communication, which lead to improved service levels and increased operational efficiency.
LTL carriers often prioritize their business with trusted shippers and provide expedited service to ensure shipments are picked up and delivered on schedule. Relations based on collaboration, problem-solving opportunities, rates, and access to capacity during peak demand can positively influence the shipper and carrier relationship. By investing in your transportation providers, your organization can increase its reputation and operationally improve its transportation logistics, which will ensure you can “win” in a competitive market.
- Reputation: The uShip platform allows you to be rated and receive feedback, demonstrating your reliability to carriers. This improves their ability to prioritize your shipments during peak times.
- Efficiency: Repetitive collaboration allows the carrier to get used to your requirements and the carrier to the shipping needs.
- Price Bumps: Long-term shipper/third-party logistic relationships can increase stability and better pricing as carriers have consistent, repeat business.
HOW TO WIN CARRIERS’ HEARTS: KEYS TO BEING A SHIPPER OF CHOICE
Impressing LTL carriers goes beyond simply satisfying their requirements; it requires a commitment to a few guiding principles that make a difference. While no badge signifies your success, dedication to these ideals sets you apart as a remarkable shipper. Here’s what you need:
- Anticipate future needs: Provide sufficient notice for each shipment to facilitate efficient planning and organization. Early bookings ease the pressure on LTL carriers and allow them to coordinate their fleets effortlessly.
- Downtime reduction: Minimize driver waiting times during loading and unloading. Adequately staff your facility, use preloading techniques, ensure terminal availability, establish a routing strategy, and organize documentation to avoid unnecessary delays.
- Fast Payment: Quickly process payments for cleared transactions and additional fees. Fast payment allows carriers to manage finances with confidence and expedite subsequent shipments.
- Take advantage of flexibility: Offer dock access outside regular business hours, catering for weekend and holiday shifts if needed. Such adaptability allows carriers to overcome unexpected obstacles.
- Data-driven reasoning: Leverage comprehensive analytics tools and systems to inform shipping tactics. Integrated traffic management systems enable understandable choices and transparency.
- Communication: Maintain clear and ongoing channels of communication with your associates. Share updates regularly, address concerns openly, and respond promptly whenever unexpected complications arise. Carriers appreciate a proactive approach rather than excuses when faced with obstacles.
Ultimately, actions convey sincere intentions more convincingly than mere statements. Implementing these guidelines builds credibility among carriers and turns you into a valued companion. Partnering with an appropriate third-party logistics provider simplifies the execution of these initiatives and allows you to focus on core business objectives.
HOW TECHNOLOGY CAN SHAPE SHIPPER-CARRIER RELATIONSHIPS?
In the quick-moving world of logistics, technology is essential for improving operations and building solid connections between shippers and carriers. Here’s how different tech tools can help improve these relationships:
#1. Combining TMS (Transportation Management Systems) with Other Programs
Transportation Management Systems (TMS) are vital for handling complicated logistics networks well. By connecting TMS with other business software, shippers can make their operations smoother, which leads to:
- Better Route Planning: Smart computer programs help find the best routes, which saves time and fuel.
- Flexible Scheduling: Real-time information allows quick schedule changes, ensuring deliveries arrive on time despite unexpected problems.
- One Place for Information: Putting all shipment details in one place helps make decisions and work together better.
#2. Real-time Shipment Tracking and Visibility
Real-time tracking systems allow people to see where their packages are and what’s happening with them, which is helpful for a few reasons:
- Better Understanding: People sending and carrying packages can watch over them as they move, which helps them trust more and be more responsible.
- Quick Problem Solving: If there’s a delay or a problem, they get a fast warning to fix it before it worsens.
- Happy Customers: Telling customers when their packages will arrive and how they’re doing makes them feel good and better trust the person sending the package.
These tracking systems also help prevent packages from being stolen or lost, ensuring they arrive securely and on time.
#3. Using Data Analysis for Ongoing Improvement
Data analysis is essential for spotting patterns, making processes better, and making wise choices:
- Checking Results: Considering necessary measures like how fast things are delivered, how much it costs to travel a mile, and how well LTL carriers perform helps find ways to improve.
- Forecasting: Use past information to guess what people want and handle how much space is needed more smartly.
- Making Things Work Better: Data can show where things are not working well, allowing companies to improve their work and save money.
TIPS TO BOOST YOUR SHIPPER OF CHOICE STATUS
Being a reliable shipping partner is very important. Customers want a dependable and easy experience each time they use your services. Here are some tips to help you achieve this:
Set up Key Performance Measures (KPIs): Find the primary measurements to help you check and assess your preferred shipper status. This could involve tracking how often you pick up and deliver on time, how long people usually wait, how frequently there are claims or damages, and how satisfied LTL carriers are overall. Regularly monitoring these KPIs will give you helpful information about how you’re doing and where you can improve.
Monitor Carrier Feedback and Ratings: Ask for and pay attention to the opinions of the companies that transport your goods. You can do this by sending surveys, talking directly to them, or checking what people say online. Knowing the problems LTL carriers face will help you see which areas you need to work on to improve.
Use Continuous Improvement Strategies: Based on what you learn from tracking your KPIs and carrier feedback, use continuous improvement strategies to enhance your reputation as a preferred shipper. This might mean improving your processes, boosting communication and teamwork, or providing rewards and recognition to top-performing carriers.
Acknowledge and Reward Carrier Partnerships: Thank and reward the LTL carriers who have helped you become a preferred shipper. This could involve giving them financial rewards, awards, or just showing appreciation for their crucial partnership. By acknowledging their hard work, you will build stronger relationships and motivate them to keep performing well.
CONCLUSION
Aiming to be the preferred shipper is crucial for companies looking to improve their shipping processes and form solid, trustworthy relationships with transportation providers. This preferred status means better service, lower prices, and higher efficiency. By following the best practices we’ve discussed, like making operations smoother, maintaining good relationships with LTL carriers, using modern technology, and following rules, shippers can become the top choice for carriers. Doing these things helps the carriers and makes the whole transportation system more efficient and reliable. Begin using these strategies now to become a shipper that LTL carriers like to work with.
FREQUENTLY ASKED QUESTIONS
What does it mean to be a “shipper of choice”?
Being a “shipper of choice” means carriers prefer working with you because you make their jobs efficient and successful. This can lead to better service and rates.
How can flexible schedules make a difference?
Flexible schedules help carriers manage their time better. Allowing pick-ups and deliveries outside of traditional hours shows you’re accommodating, which carriers appreciate.
Why is timely payment necessary?
Paying LTL carriers promptly builds trust and reliability. Carriers are more likely to prioritize your loads if they know they’ll be paid on time.
What is the significance of reducing driver wait time?
Minimizing the time drivers wait at your facility increases their efficiency. Less waiting means they can take on more loads, benefiting both parties.
How does clear communication improve relationships with carriers?
Clear, consistent communication helps avoid misunderstandings and mistakes. Keeping everyone informed ensures smoother operations and builds better relationships.
Why is it important to give sufficient lead time?
Giving carriers ample notice allows them to plan and allocate resources effectively. This minimizes last-minute scrambles and ensures your load is handled correctly.
What role does infrastructure investment play?
Infrastructure investments like upgraded loading docks and streamlined processes can enhance efficiency and make your facility more appealing to carriers.
How can offering weekend pick-ups benefit you?
Providing weekend pick-up options can help carriers manage their schedules flexibly, making your loads more desirable.
Why should you ensure easy location access?
Facilities that are easy to access reduce the hassle for drivers. Clear signage and ample space for maneuvering make a big difference.
How can you maximize driver time?
Efficient operations that minimize waiting and streamline processes help maximize drivers’ on-duty hours, making your loads more attractive.
What is the benefit of establishing long-term relationships with carriers?
Long-term relationships foster loyalty and reliability. LTL carriers who know and trust you will likely go the extra mile to meet your needs.
