Webinar report: shippers have a lot of work to do if they want to be considered "preferred"

 Source: Shutterstock

Source: Shutterstock

It's up to you.

As the recommendations cascaded down from shipping expert Brian Reed on the path to becoming a "preferred shipper" during a webinar Thursday, that lesson came through repeatedly in his advice to the side of the equation that has lost leverage as markets have tightened and drivers have become scarcer.  Reed's comments came in a webinar co-sponsored by Arrive Logistics and Freightwaves. Reed was most recently the vice president of transportation and customer serve at Niagara Bottling.

Being a preferred shipper is heavily about cost, Reed said. But costs can be measured in other ways, and being viewed by carriers as "preferred" means that "you get the pick of the litter...you are going to get the best providers out there," Reed said.

As Reed noted, it's a timely topic. "It's applicable at any time, but with the market as it is today, it's now particularly important for shippers," he said.

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It also starts right away, "with the first interaction." Reed said. "If you are going in there and attacking, and think that shipping is a commodity, then you may come out of it with what you think is an attractive rate structure," he said. But it sets up a relationship between carrier and shippers that may not yield the sort of benefits that accrue to the shipper later if it is considered a desirable customer.

As Reed went through his slides, each of them came with a list of what appeared to be common-sense steps that shippers should take. But their presence on the list in a presentation by a shipping expert indicates that they are clearly not the best practices followed by all.

Transparency came up frequently. 

"If you're going to have two, three or four sitdown negotiations, let them know that up front," Reed said. Advance notice of shipping needs is desirable, but too much advance notice might be excessive; 30 days, for example, is more notice than any carrier really needs. Depending on the lane, depending on the product to be shipped, and other variables, Reed recommended that shipper and carrier look for the "sweet spot" on advance notice.

Another thing Reed stressed: a shipper should bring its operations staff into the negotiations, either at the table or actively consulted separately, so that the operation team’s capabilities can be clear during the negotiations and that the ops team knows what to expect as a result of those discussions.

Measuring the performance of the carriers goes on at every shipper. But what about internal performance reviews at the shipper itself. "Are you living up to your volume commitments?" Reed asked rhetorically. "Are you giving them what you said you should give them?"

Working across lines at a shipper is important, the classic case of getting around silos. Reed said he had worked with companies that in some parts of their operation, a highly efficient approach toward shippers had been implemented, to be thwarted by other parts of the company. "And then they have lines of trucks out the door," he said. The reputation of a shipper like that gets around the industry, and it costs them.

Avoiding that sort of onsite mess was the target of a series of questions on one of Reed's slides:

  • How is your communication with the driver onsite and their dispatcher? Are they updated regularly and timely?
  • Is your facility ready for the truck arrival? Is documentation ready? Is the product ready? How fast is check-in?
  • Do you have designated areas for early trucks to park? How efficient is your process to work them in?

And so on.

A lack of understanding and trust will cost the shipper. "If they think you're a one or two hour loading time, but you think you're a one hour loading, they may bake in two hours," Reed said. "And that will impact your rates and your costs."

Reed never got too far from reminding the webinar which side has the upper hand. "A lot of people have very tight docks, tight space, and tight forklifts," he said. "They're all at a premium."