In a recent blog, we stressed the importance of making the effort to become a "preferred shipper” to ensure equipment availability in a shrinking equipment market. If you are a shipper relying on for-hire carriers, or a 3PL, you certainly should be aware of the looming issues conspiring to make it more expensive and more difficult to get your goods delivered. The one bright spot in the industry are falling fuel prices over the last 12 months. However, while this lone bit of positive news is certainly welcome, it will have little effect on the equipment availability issue that is spurred by several factors: a serious driver shortage, a lack of interest in young people to take on a driving career, ever-increasing government regulation and tightening capital markets.
The potential challenges for moving your product in a timely and cost-effective manner are significant risks in today's driver marketplace. Your risks can be managed and mitigated by doing anything possible within your organization to become a customer that carriers prefer to do business with. Some ways this can be achieved are by ensuring the comfort of visiting drivers and implementing aggressive, carrier favorable, accounts payable policies. Let's take a look at some suggestions on how to become more desirable to carriers and see which enhancements may be reasonably implemented in your organization:
Maintain a Good Relationship
Of course, this may seem obvious, but maintaining a good working relationship with your carrier is not the sole responsibility of the Traffic Manager. There should be a culture shift in vendor relations, particularly when it comes to carriers. Historically, truckers have been treated as second-class citizens when it comes to driver accommodation and respect for one’s time. A reasonably comfortable waiting area for the driver is an inexpensive and easily implemented enhancement to the driver experience.
Also, enforcement of loading and unloading times is another far reaching issue that should be another easy fix. Time management has never been more critical for the driver, as well as the equipment he is managing. Ever-increasing government regulation is significantly affecting the hours per day that both driver and truck can generate revenue. The culture of the improved relationship should find its way into the accounts payable department as well. Not paying your freight bill according to terms will have a negative impact on your relationship with any vendor. Ensure that all protocols for timely payment are in place to avoid any payment processing issues.
Load planning can sometimes be a real guessing game for carriers. To some degree, being able to anticipate shippers’ daily or weekly needs is very helpful in labor planning and equipment positioning. Shippers who can schedule repeat and repetitive shipments on specific days and at predictable weight breaks will help load planners with both equipment availability and lane balance expectations. The profitability of a trucking company is greatly impacted by empty miles and partially loaded trucks. This is just another area where shippers historically do not utilize much planning. When equipment was plentiful, they didn't have to. But, today, it is increasingly more important to maintain a consistent and reliable level of service.
Treat Your Drivers Well
Drivers greatly appreciate others’ appreciation of their time and comfort. In addition to a relaxing driver waiting area, here are some worthwhile tips for improving driver experience, published by the US-based Truckload Carriers Association (TCA) and National Industrial Transportation League (NITL):
- Maintain reasonable hours for loading and unloading according to the volume of shipments;
- Tender cargo with all paperwork in order and promptly load and unload trucks that arrive within the scheduled time
- Make reasonable efforts to be flexible in loading/unloading trucks that arrive early, or late, or without an appointment
- If dock space is unavailable, don’t make drivers wait in line; contact them when space will free up
- Have a guard station in the yard so that information is readily available.
- If using a drop and hook program, ensure that empty trailers are available as needed
There are several options for shippers to maintain a preferred shipper status and help to ensure equipment availability and timely service. Shipper-carrier collaboration can be very beneficial when needs from both sides are identified and protocols are developed to ensure those needs are met. Try to be proactive rather than reactive when addressing carrier and driver needs. Being a true partner means you understand one another's business and both have a heightened degree of flexibility when it comes to making everyone successful. Being a preferred shipper provides a measure of security in your vendor relationship that will provide value for future growth.