This is the first post in a four-part series on how to achieve best in class shipper status. As we have written in the past, carriers are now calling the shots with capacity constraints continuing and expected to increase. In this first post, we will give an overview of the 10 areas shippers can focus on to attain the “Best in Class Shipper” status. We will focus primarily on LTL shipping, but some of these areas can be applied to other modes of over the road shipping. In subsequent posts, we will dig deeper into these areas. As a 3PL focused on transportation management, and especially LTL freight management, Cerasis is well positioned to help you achieve the “Best in Class Shipper” status.
An Overview of Achieving LTL “Best in Class Shipper” Status
As more organizations supply chain grow more complex, the need for additional shipping options will grow. Unfortunately, a myriad of available shippers, third-party logistics providers (3PLs), and other transportation carriers continue to confound your LTL options. However, a “Best in Class Shipper” has realized how optimizing different aspects of their processes will improve the satisfaction of both delivery recipients and clients. To understand how a shipper achieves “Best in Class Shipper” status, you need to take a look at some of the chief factors that influence shipping activities.
Shipping freight inherently comes with a large amount data. This data may include invoice numbers, pick up and delivery dates, originating addresses, product descriptions, shipment weight, method of transport, destination address, rate of transport per haul, fuel charges, and the costs of loading and unloading the items at the distribution center. Each data entry is an opportunity for data capture and analysis. Additionally, ensuring a superior data capture capability allows clients to become more confident in tracking and visibility in shipping.
Knowledge of the Carrier’s Business
To have the best value per mile in transportation and shipping, a given shipper must have a working knowledge of how shipping processes operate. For example, the carrier may need to know how to handle delicate items, manage private and rented fleets, budget expenses, conduct international trade, ensure compliance to regulations, maintain safety, and make sure all KPIs align across the manufacturer-to-delivery route.
To gain “Best in Class Shipper” status, an organization must understand how businesses of varying structures benefit from LTL processes. Furthermore, all aspects of the LTL journey need to involve both data capture and knowledge to promote “Best in Class” status.
Freight Spend Management
Since cost remains a top priority of any business, monitoring, reducing, and accounting for costs throughout the shipping process needs to be a chief priority for “Best in Class Shippers”. However, shippers can only reduce expenses and cost by understanding how each cost relates to the overall transportation budget and how it fits in within the rest of the organization. As a result, all shippers must have organization, knowledge, and data capture in place before attempting to cut costs and create a strong budget.
A “Best in Class Shipper” must monitor inbound freight management, plan shipments logically, use other carriers as needed, and effectively management the transportation system. If a shipper fails to understand how to effectively manage freight by understanding and effectively mastering shipping processes, pick up and delivery dates may run askew, drivers may receive penalties and fines for violations, customers become upset, and invoicing may be incorrect. Unfortunately, each of these problems represents a potential hurdle to achieving “Best in Class Shipper” status.
Use of Technology
We have discussed the role of technology in improving shipping processes previously, and “Best in Class” shippers understand how technology will benefit their companies. However, many tend to think of technology as improvements to today’s available technology. Yet, many shippers may have not implemented technology options, such as advanced Transportation Management Systems (TMSs), mobile apps, and optimized route planning and logging processes. As technology extends further into the shipping space, it will become an integral part of keeping costs low and customers pleased.
If you have a strong knowledge of shipping, organization, process monitoring, control over your budget, and control over your shipping processes, what sets you apart from your competitors? The answer is your business strategy. Your business strategy needs to include focusing on particular parts of shipping processes, working with industry-leaders, focusing on reduced costs, and reducing inefficiencies in daily operations. Furthermore, your strategy allows you to compete with larger shippers and enterprise-scale businesses with purchasing powers outside of your scope.
Monitoring of Key Performance Indicators and Reporting
Analytics remains a chief concern of businesses in all industries around the globe. In shipping, key performance indicators (KPIs) help you identify when, where, and why a problem may have occurred. Additionally, KPIs show you what areas need to be improved through careful monitoring, analysis, and changes. This may include introducing technology to pen-and-paper environments, monitoring financial indicators for your cost versus your revenue, freight rate management, and performance evaluations of your deliveries.
“Best in Class Shipper” status demands a working relationship between carriers, your clients, and your customers. To grow in the supply chain, you need to help carriers take full advantage of any available space, keep costs down, and improve predictability in processes. Additionally, by working together with carriers, you can reduce the number of obstacles between your business and gaining “Best in Class Shipper” status. This may sound counterproductive and hint at profit losses, but you do not want to become an enemy of those who can help you grow.
Even with all of these points in place, a shipper still needs to execute all of them in an effective and collaborative manner. Detailed reports are useless if they do not lead to improvements. “Best in Class” shippers understand how each of these elements must work together and assumes a leadership role in the oversight of such elements.
By following these ten elements of a “Best in Class Shipper”, your company can grow beyond your expectations. Furthermore, they help drive profits, satisfied customers, and give you a competitive advantage in the shipping world. In the next post, we will take a closer look at how each of these elements helps avoid some of the most common problems in LTL shipping practices.