How does your company select the freight carrier to move your product?

Posted by admin on Feb 7, 2014 9:59:00 AM

Our business model was developed 35 years ago, and still holds true to be a successful model today. The model was based on how a company selects the motor carrier it puts it's product on. I was sharing some space in one of our customers facility's to operate my business, the arrangement was for our company to run his shipping dock as well as insuring that his product was going on the best carrier for price and service. Soon into this venture I was walking from the parking lot into my office, and I had to walk past the loading docks and I noticed a carrier backed into the dock getting loaded that I knew we didn't have an agreement with. When I approached the person who was charged with selecting what carrier should move which shipments, I asked them why was such and such carrier backed into the door getting loaded. I was beside myself when I heard the answer. The carrier salesman in question had just visited this person the day before and dropped off a box of candy, and asked if they would give them a chance on moving a few shipments with them, the individual told me they didn't see any problem with giving them some business for the recognition of the thoughtfulness, they were a well known carrier, what was the big deal. I couldn't believe the answer, I thought I was going to blow a fuse, deep down I knew I had to keep my composure, if I called this person out on there theory of carrier selection, it would have done more damage than it was worth at the time. I walked away and put a procedure together that evening and introduced it the following morning, and said they were to only select the carrier based on the outlined procedure, no deviation even if somebody brought them a box a candy, I think they got the point. When the freight bills arrived in the mail from the carrier a few days later, I further drove the point home by showing them what that cost the company in excess freight charges, I don't remember to the penny but the amount was just over a $100.00 in additional costs for the three shipments, expensive box of candy.
From that day on I knew I had to come up with some type of system that would be easy to select the proper carrier from not only a service standpoint (Transit Time) but a cost standpoint as well. Technology was just being introduced 35 years ago, it would take me couple of pages to explain those few years of perusing my vision of what we still refer to today as a "Least Cost Routing" program.
That model serve's us well 35 years later. It is unbelievable, carrier selection is still being based on the wrong reasons. Don't believe me, ask what criteria is being used on selecting a carrier within your company to move your product to your customer.
Times have changed, Technology is used on almost every decision we make today. As many things have become easier for us, on the other hand things like carrier rates have become much more sophisticated in how they are developed. Carriers have very sophisticated costing systems to determine there rating structures. Carrier rates are not created equal. Items such as imbalances in lane densities, if a carrier has two trailers of freight moving into a particular point or terminal and only one coming out will have a bearing on that carriers rating structure. Just to give you an example of what I'm saying, ask the person that routes your freight for your company, to provide you with a rate from three different carriers on a shipment moving out of your facility, just so you can see the obvious example of what I'm saying, request it on a shipment of 1500 lbs or greater.
Choosing the proper carrier based on cost and service is no easy task without the proper technology's. give us the opportunity to show you that selecting the proper carrier and for the right reasons is something that can be done shipment after after shipment along with the proper reporting to insure freight is not being given out based on a simple gift like a box of candy.
Visit us at for more informative articles on Learning with Carl.
Should you have an issue in the distribution of your product, feel free to send me an e-mail to receive a no obligation opinion.
Keep an eye open for your next "Learning with Carl" article. I promise you another challenging article to make you think how you can bring savings to the distribution of your companies product. It's not business as usual.

Carl Lappke

Topics: Third Party Logistics