How to Outsource Your Transportation Needs
Shippers have a tough job.
Warehouse people need to manage inventory and space. Transportation people need to manage fleets and schedules. But, as the ‘middle-person’ between the warehouse and transportation, shippers need to know what’s happening on the floor and on the road. They need to make sure freight is ready to go, and that it gets where it’s going on schedule.
We’re not saying anyone has a tougher job than anyone else, but shippers sure do have to juggle lots of variables. One of the most basic is choosing transportation modes and carriers for their shipments. It means, on top of everything else they need to manage, shippers also have to know the shortest distance between their loading docks and their cargo’s destination. And that’s not always measured in kilometres.
It can be a difficult task, considering that shippers aren’t transportation specialists. But there are ways for shippers to make it easier to find the right carriers and modes of transportation.
Here are just a few tips for sourcing your transportation requirements.
1. Know What You’re Shipping
Different sorts of freight have different classifications. That means, if you are looking at a carrier’s LTL (less than a truckload) schedule, you need to make sure they can carry your freight on a particular load.
LTL loads are also at higher risk of having issues due to increased handling and longer routes to the final destination.
2. Focus on Total Cost, Not Price
This is perhaps one of the biggest mistakes that shippers make, and it’s easy to do. With no other way to compare options, choices are made on the bottom line price. But too often, the lowest-priced option turns out to be the most costly on a number of levels.
First, there are reliable ways to ship freight at lower costs than others. You could expedite something by dedicated jet, which can be costly, or you could ship it by rail – at significantly lower prices. But the rail shipment will take longer to arrive. If your cargo is time sensitive, or your customer is very demanding, the lower-priced option might be the one that costs you the most in the end.
Other ways that low prices can cost you more is through increased risks and decreased value. Basics like customer service, carrier reliability and on-time record are often not as impressive with lower-cost options. But it’s the unforeseen areas that can cost the most. InBound Logisitics cites an example of a tobacco manufacturer who chose a carrier to save $5,000 in shipping costs, only to suffer $25,000 in damages to a shipment of tobacco that the carrier left in the rain.
3. Keep All Your Options Open
Very often, shippers can fall into a rut of always using the same mode(s) of transportation, regardless of the particulars of each shipment. Different shipments can have different sizes, requirements and schedules on different days that might make using different modes more economical.
Also, by keeping active with different modes, when you experience a disruption, like clogged highways during a hurricane evacuation, you’ll be all set to use alternatives, like rail, to stay on schedule.
4. Don’t Put Anything Off Until Tomorrow
The sooner you can get reliable modes and carriers in place, the more bargaining power you have. In other words, you have no bargaining power when you’re trying to move a shipment at the last minute. If possible, set up a test program to try out different options before you actually need them.
5. Check References
And not just the ones supplied by the carrier. Find out who they’ve worked with before and call them. You’ll be surprised at how willing shippers are to help each other out.
If you’d like to learn more about using transportation logistics, mode optimization and how to get the best value for all your shipping requirements, get in touch with us here at PiVAL.
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