“There are some particular differences from carrier to carrier, but they generally all follow the same rules,” he explains. “In LTL, shippers pay for their share of the capacity inside the truck and it’s a matter of understanding capacity rules. If they know their business, they know what to look at. “Identify the characteristics that are important to you,” Dyer suggests. “When you do a carrier bid, you might occasionally find a carrier that doesn’t fully disclose surcharges but, for the most part, carriers tend to be honest.” FCUINLDTUINRGALA FIT Shippers sometimes make the mistake of ignoring culture fit when considering carriers. “Overlooking alignment in values and working styles can lead to friction and reduced collaboration,” Moore says. Shippers need to know how carriers solve problems when they arise and whether they have a proven track record for doing so. “Contact client references
“Often, shippers establish long- term contracts with carriers to ensure coverage at a specific cost,” Cupp says. “Long-term contracts can provide cost stability and potential discounts, making forecasting and managing transportation budgets easier.” During contract negotiations, shippers should negotiate surcharges and accessorial charges upfront. “Sometimes, paying a higher rate for a more reliable carrier can save costs in the long run by reducing delays, damages, and lost sales,” he adds. Too often, shippers believe that a discount is the most important factor in choosing a carrier. “That approach continues to plague our industry,” Burnham says. “Some informed shippers look at the net costs and factor in surcharges and accessorial fees, but even they are missing the mark. “To get a true understanding of costs, you must include your entire team and anyone related to the shipment,” he says. Modeling surcharges “is fundamental to understanding total cost,” Dyer says.
like you would when vetting a potential employee,” Burnham recommends. Carrier contracts should also include a clear dispute-resolution process for handling conflicts. They should also allow for regular audits and reviews of service performance and cost structures, and clearly define the conditions under which either party can terminate the contract. “Failure to thoroughly vet carriers for their financial stability, service capabilities, and track record can lead to choosing an unreliable partner,” Cupp says. Visiting a carrier’s operation to make sure the facilities match the marketing brochure and to see firsthand how the warehouse handles shipments is a wise decision. Carriers should offer financial stability and serviceability, too. Check carrier financials using public information and services such as Dun & Bradstreet and Carrier411. “The first sign that a company is in financial distress is if they stop paying on time,” Dyer explains.
When the economy recovers, a shortage of carriers is possible. To offset that issue, shippers can develop relationships with financially stable carriers now to help guarantee future capacity.
September 2024 • Inbound Logistics 35
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