Does General Pricing = Transactional Shipper? by Michael Bookout | EVP Pricing and Carrier Relations

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Capacity is a growing industry concern and is now being realized by the LTL and TL sectors. Due to the changes in hours of service and driver shortages over the past year, carriers are starting to feel the effects of these issues.  We all knew that these issues were coming; we just do not want to admit that they are here and not going away anytime soon. Carriers are now looking at their business levels with more scrutiny than ever before. Carriers are holding daily meetings to address unprofitable business, lanes that are at capacity or near capacity, how to tackle the driver shortage, and keep the drivers that they currently employ.

 

GlobalTranz enjoys general pricing from our LTL partners. There is responsibility in having a general pricing; we need to make sure we are doing our part for our carriers and clients to ensure that the general pricing is being used correctly. A general pricing tariff is primarily structured to offer a competitive price for freight that moves business to business. The carriers give carte blanche to GlobalTranz to walk into any account, anytime of the day and have instant rates to offer the client.

As a 3PL, we need to make sure that we are honoring our clients’ shipping needs, freight mix, and carrier mix for each and every client that we bring on board. The days of price shopping for the lowest rate are coming to an end. Carriers will quickly identify these “price shopper” clients and 3PL’s both.  The carriers will drop their pick-ups and deliveries to the bottom of their priority list. We need to start building relationships between the carrier, agent, and customer.

 

A transactional shipper is a shipper that has more than one shipment per day but chooses a different carrier for each shipment based strictly on a lowest cost basis. We need to look at working more closely with our clients and select strategic carriers that best match their needs to handle the majority of the clients’ shipments.  This will decrease the amount of missed pick-ups, claims, reweighs and reclassifications for the clients. Carriers will realize improved profitability based on an increased number of shipments per client, a better understanding of the clients’ shipping requirements, and learn how to handle the clients’ product more efficiently. This is a gain in efficiency for the carrier, customer and agent.  

Everyone wins!

 

We would like to challenge the GlobalTranz network over this next quarter to work more closely with each client and their carriers. Get to know the local carrier operations and ask what type of freight works best in their system.  Learn more about your clients’ shipping requirements, identify their pain points and try to find solutions that will ease their pain.  Find out how many other 3PL’s they currently work with and try to separate yourself from the other ‘transactional’ 3PL’s by becoming a better partner with your clients.  Become a part of their team!

 

We would like to see a consolidation of shipments to our strategic LTL partners.  We can promise you, missed pick-ups will be reduced, service levels will improve, and re-weighs and reclassifications will reduce.  They will never disappear completely, but there will be a dramatic decrease.  All three of these issues stem from transactional shippers. Let’s work together and make a positive change for our clients and carrier partners. 

 

**I would like to thank Chris Scheid and Kiki Worthington for their insight into this article.

 

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