Shipper of Choice: REDEFINED
Vice President // Gulf Winds
Shipper of Choice has become a buzzword in transportation circles. Like most overused phrases, the original definition or intent is often lost.
Currently, Shipper of Choice describes the value of having a Shipper or Beneficial Cargo Owner (BCO) employ a long-term value approach when purchasing transportation rather than treating it as another transactional commodity. By being purposeful in decision making, they unlock potential capacity, improve service, and reduce overall supply chain costs.
With market caps on available capacity, a deteriorating supply of available drivers over the next several years, increased regulations, and a higher demand for trucks, shippers now find themselves in competition with each other for capacity.
This new normal is requiring shippers to dive deeper into better account management processes, swift on-boarding of new opportunities, and a deeper understanding of the freight system from the eyes of the driver.
The traditional process of blindly asking for bids and sending out load tenders to the cheapest option is no longer a sustainable option. Instead, shifting to a supply chain with a focus on the driver is a game changer!
That’s great, but where do I start?
- Change the Mindset. Change the Culture.
Shift the procurement and carrier management practices from transactional to strategic. Work with carriers on a 1:1 basis to understand their strengths, weaknesses, and value creation. Taking a long-term view, despite short-term market fluctuations, shows loyalty and allows the carrier to plan around your business needs.
- Invite Key Stakeholders into your Business
Once trust has been established, openly share data, trends, and decision making around supply chain goals with your vendor partners. Pulling back the curtain creates engaging opportunities to work together to accomplish similar goals. There is no silver bullet to creating capacity, but small changes in the process is key!
- Collaborate. Collaborate.
Require monthly or quarterly Key Account Management meetings to jointly assess KPIs and the performance of both parties. By offering insight and background into the metrics, both companies improve in the process.
As we approach 2019, becoming or even remaining a Shipper of Choice is more important than ever.
Let’s work together to accomplish goals by further understanding the most important asset in the supply chain: The Driver.