Driver issuesNewsWebinar

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

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.

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.”

Tags
Show More

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

3 Comments

  1. This is what we do over at Dock411. We have a database of shipper/receivers and collect over 75 attributes about each facility. We show these to drivers, carriers, and brokers to make stops faster, easier, safer and less frustrating. Shippers also have to ability to post their facility and what they want drivers to do there so there’s so surprises.

  2. You mentioned that a few companies (e.g. Convoy, Uber Freight, Arrive Logistics, etc.) are ahead of the curve when it comes to offering the type of data and visibility to become a "preferred shipper".

    What types of information are they sharing to help companies make better decisions?

    1. Hi Jack, I work at Convoy – we recently issued a blog post that touches on this topic: https://convoy.com/blog/the-vicious-cycle-spot-market-volatility-and-primary-tender-acceptance/

      Some examples of the type of information we share include data around wait times, inconsistent or surging volume, short lead times, and a variety of other metrics have an adverse effect on tender acceptance. Convoy is proactive in sharing data-driven insights to help shippers uncover and address network-, lane-, and facility-level challenges to improve performance and cost structure.

      For more information, feel free to email shipper@convoy.com or call 855.5.CONVOY – a team member would be happy to help.

Close