A term that's been popularized recently is "shipper of choice." A shipper of choice is, as it sounds, a shipper that carriers prefer to do business with. Being a shipper of choice can mean the difference between your freight moving faster and at a more reasonable rate than your competitor's. In fact, there are few greater competitive advantages your transportation department can achieve than being recognized as one.
The good news is that becoming a shipper of choice is almost entirely up to you. Ben Graeff, Chief Operating Officer at FreightPlus, joins us to discuss what it means to be a shipper of choice and how to achieve it.
What Does It Mean to Be a Shipper of Choice?
"To become a shipper of choice, you need to be a lot more carrier-focused," said Graeff. "The days of beating up the carriers are long gone."
Traditionally, shippers have treated carriers interchangeably, and relationships have been transactional. However, things have changed.
"We're encouraging our clients to become more proactive with their carriers," Graeff advised. "It's really not a commodity service anymore. As shippers, we need to be more in tune with the struggles that drivers face."
Addressing the challenges that carriers and truckers experience is key to becoming a shipper of choice. But what are some of these challenges?
Time: Keep the Trucks Moving
"There is a clear opportunity to free up capacity, and that all ties back to time. If drivers don’t have clear instructions on your facility – such as where the dock doors are, specific appointment and payment requirements, PO requirements, and shipping and receiving times – even 15, 20, or 30 extra minutes spent at your facility adds up," Graeff explained.
Carriers take note of these inefficiencies. With ELDs now in every truck, they know exactly how long drivers are being detained.
"If a driver can drive for 11 hours based on hours of service regulations, and you've taken 1 hour out of that, you've removed almost 10% of capacity right there."
As the adage goes: time is money. Each minute a trucker spends stuck at a shipper's facility is time off the road, which means lost opportunities to haul new shipments. Shippers who are known for excessive wait times are having their contracts ripped up and their calls for new shipments ignored.
"My company has ended contracts with several shippers because of how they treated drivers, improper dock times, and improper dock setup. With the implementation of ELDs, time is money now more than ever," said Paul Charles, a veteran truck driver for Dedicated.
Step 1 to becoming a shipper of choice: Keep the trucks moving. If that requires an investment in more dockhands, forklifts, operators, ASRS, and/or docks and doors, shippers should be encouraged to make these investments. Not only will these improvements elevate your status among carriers, but they will also improve overall dock efficiency throughout your supply chain.
Parking: Provide Driver-Friendly Facilities
Since truckers must operate within hours of service limits and can no longer manipulate their logbooks, facilities where they can shut down for the night are favored by carriers.
"There's a shortage of available truck parking in the US where drivers can stop for the night and get some sleep. If you have available parking on-site, believe me, that's a huge benefit. We've seen studies showing that if carriers are approaching their 9th hour of drive time and know there's a facility where they can stop for the night, they will," said Graeff.
Step 2 to becoming a shipper of choice: Be driver-friendly. Facilities that turn drivers away when they are near their hours-of-service limit are highly unlikely to become shippers of choice.
Basic Amenities: Take Care of Drivers' Needs
Truckers spend excessive amounts of time behind the wheel. After dealing with traffic delays, long wait times, and check-ins, they need access to basic amenities.
"Have a sink and a bathroom – really, that's all we ask," said Charles.
Step 3 to becoming a shipper of choice: Provide basic amenities. At the very least, have clean, unlocked bathrooms. For even better standing with carriers, consider adding vending machines, a break room, and free WiFi. Remember, the happier the driver is, the happier the carrier will be.
Flexibility: Be Accommodating
The roads are congested, and traffic is only getting worse. Carriers are often open to exploring new ways to create capacity by working with shippers who have flexible delivery days and hours.
"A key one that we've consistently heard from carriers is that off-hour or weekend availability helps out a lot," Graeff said.
Flexibility doesn’t just apply to hours of operation but also to how cargo is received. Drop-and-hook operations move a driver along much faster than a live load.
Step 4 to becoming a shipper of choice: Be flexible. Nighttime, weekend, and off-peak delivery hours are appreciated by carriers, as is eliminating detention times with drop-and-hook operations.
Technology: Communicate and Be Predictable
Communication is key, and in the 21st century, that means using technology. Carriers are demanding visibility, as it enables them to react in real-time and prepare for future loads.
"Now is the time to invest in a transportation management system. This technology will increase the predictability of loads for carriers. They’ll have greater visibility further upstream and be able to plan their routes and drivers better. It will prevent situations where drivers arrive and no loads are ready," Graeff advised.
Step 5 to becoming a shipper of choice: Be visible and predictable. Using a transportation management system helps with planning and reduces both costs and time, which carriers value highly.
On-Time Payment: Honor the Carrier's Terms
Shippers are used to paying supply chain partners on net 30, net 60, or net 90 terms. However, the truck carrier industry faces numerous upfront costs, such as fuel, driver pay, and maintenance. More carriers are now choosing to work with shippers who honor their payment terms, which often means paying immediately.
"If we're paying our carriers, on average, in 90 days, it’s a complete mismatch with the invoices that are due within 10 days for carriers. There’s a significant disconnect there," Graeff pointed out.
Additionally, forcing drivers to pay fees and fines at the receiver's dock is another practice that carriers dislike. Instead, many carriers prefer to have invoices handled by their accounting departments to avoid disrupting freight flow at the time of delivery.
Step 6 to becoming a shipper of choice: Accelerate your payment cycle. Let carriers know that you’re willing to pay on net 10 terms or less. Using a transportation management system to track billing can also help improve your standing.
The Golden Rule: Treat Carriers with Respect
The golden rule applies here: treat others as you’d like to be treated. Logistics is a relationship-based business, and your carrier is a vital link in your supply chain.
"It's just the golden rule," Graeff said. "I'm going to treat everyone, regardless of their profession, the way I expect to be treated. I don't think it's asking too much for people to say 'please' and 'thank you.' We really need to focus on building relationships with carriers and their drivers."
Step 7 to becoming a shipper of choice: Treat carriers as business partners. Accommodate their employees and recognize the challenging work they do to ensure your freight arrives on time. And remember, leave the bathroom door unlocked.
Summation: A Shipper’s Choice
Becoming a shipper of choice is indeed a choice. It’s a decision to not only improve your standing with carriers but also improve your internal efficiencies. Nearly all the steps involved benefit both parties.
As Ben Graeff said:
"There isn't one thing you can do to become a shipper of choice. It's a combination of several small things that give you that competitive advantage. First and foremost, abide by the golden rule. Treat carriers with respect. Have open and honest communication. Collaborate with your carriers. Don’t just mandate to them. Improve your turn times, because time is money for these drivers. Be flexible with your delivery and payment terms."
Ben left us with one final piece of advice:
"Lastly, if you haven’t invested in a transportation management system, now is the time to do it!"
