As part of Prime Advantage, Endorsed Suppliers have been invited to share their insights on the present and future of manufacturing success. In this post, Neal Willis from Re Trans Freight looks at the challenges facing the freight carriers and how to create a successful partnership with your carrier.
Freight carrier rates are on the rise. The cost of hiring and retaining quality drivers is increasing rampantly as the need for truck drivers is fueling intense recruiting and job-swapping. In their efforts to attract and retain new drivers, carriers have to offer hefty incentives. The aging infrastructure of America’s highways is also costing both carriers and shippers more money. In addition to more hours, all of the potholes and traffic jams are yielding additional wear and tear on tractors and trucks, which increases the cost of fleet maintenance. Investment in new equipment by carriers is often necessary so they can replace their aging fleets with new ones that meet the growing demand for greener emissions and regulation compliance.
Electronic logging devices, speed limiters and drug and alcohol rulings are just a few of the government regulations on the horizon for the trucking industry. For the foreseeable future, carrier collaboration is a must for lowering freight costs. It’s arguably one of the most critical times the industry has ever witnessed. Shippers need to start making changes or run the risk of paying exorbitant rates or, even worse, potentially have their freight left sitting on the dock. Here are the areas to examine:
Small adjustments by shippers to accommodate carriers can go a long way in securing capacity and rates. Shipper and carrier collaboration helps keep the cost of service low for both parties. Simply having your staff arrive a little earlier than normal can potentially allow a carrier to deliver earlier, which might help them make a cutoff time at the terminal at the end of the day. By giving the carrier a little more flexibility with their time, they may not be as rushed to load trucks thus keeping their on-time schedules. With more time for proper handling, the risk for damage is reduced which, in turn, could lower the carrier’s operating costs.
Electronic Data Interchange (EDI), which is the standard used throughout the freight industry for electronic information exchange, can be used between a carrier and shipper to reduce costs and save time. With EDI, the time between sending bills and receiving payments can be drastically reduced for both the carrier and the shipper while lowering overall paper costs. Additionally, it creates a system where billing and shipment information can be pushed and pulled to different parties through numerous software platforms reducing clerical time for invoicing, accounting and customer service inquiries.
Inaccurate shipment information can cause problems for carriers, such as forcing them to spend more time and money conducting re-weighs and inspections. Providing accurate shipment data and information to carriers, like labeling bills of lading with the proper NMFC codes and correct product weights, can help carriers reduce processing and handling times.
The burden of finding and keeping qualified truck drivers as well as complying with increasing government regulation is resulting in increased carrier rates. Shipper and carrier collaboration is a must. As a shipper, scheduling adjustments, data and technology should be leveraged, when possible, to ensure you’re a shipper with whom carriers want to do business. Not only can it help lower costs for both parties, but it can help establish a meaningful, long-term relationship in an industry that has historically been somewhat transactional.