Whether your title is purchasing manager, traffic manager, operations manager, or any variation of these terms, you’re likely tasked with two primary freight procurement goals. You need your company’s freight to reach its destination safely and at a relatively low cost. To accomplish these goals, you may send out RFPs and go through rounds of quotes before you settle on the best transportation provider for your load(s).
As you go through this process, you’re looking for certain things from prospective providers that raise your comfort level. It’s important to realize, however, that these providers are looking for the same from you.
5 key freight procurement tips
A good relationship between shipper and 3PL should strike a balance. On your side, you need to know that the 3PL is qualified and can perform at a reasonable cost. On the 3PL side, it needs information and a little bit of understanding in order to get you the best rate possible. Here are 5 tips to help your provider help you.
1. Give Details.
From the transportation provider’s viewpoint, more uncertainty equals more risk. More risk means that the provider must quote you conservatively. It will want to protect itself in case the unknown characteristics of your load turn out to be negative characteristics.
Conversely, if the provider knows all the necessary details about your load (e.g., volume, number of loads, rear or center unload, loading hours, equipment needed), there’s less perceived risk and it can be quoted much more aggressively. So, by being upfront with as many details as possible, you can ensure that you’re getting the best rate quotes from your providers
Importantly, this applies to ordinary “shipped-this-a-thousand-times” loads as much as it does to the more unusual one-offs. Any carrier or freight broker will tell you that even the most standard of projects can sometimes have nasty (and expensive) surprises.
2. Know your product.
Try to avoid giving your provider a Safety Data Sheet (SDS) full of blank fields. We know that some information can’t be shared, but your provider needs as much information as possible to, first, accurately quote you and then to maintain the integrity of your load. The characteristics of your product will inform key details such as equipment use and which driver is qualified to handle the project.
3. Understand the marketplace.
While 2019 is projected to be a better year for shippers in terms of capacity and rates, the truck driver shortage remains a very serious concern. When the capacity crunch rears its ugly head, there are simply things that are going to be out of your – and your 3PL’s – control.
To improve your chances of securing the capacity you need, look for ways to become a shipper of choice for your providers. Relatively simple things like giving adequate lead times and ensuring that your facilities are driver-friendly can go a long way in this regard.
4. Schedule carefully.
The days and times you target for freight procurement can impact your rates. Take Mondays for example. Mondays are notoriously difficult for shipping as there are typically delays resulting from the previous week’s work. In the bulk shipping industry, this often includes tank washes that couldn’t occur over the weekend and now must be performed on Monday before the truck can be of further use. If you must ship on Monday, it can and will be done – just know that you may receive a higher rate quote.
Additionally, it is important to keep an eye on the weather and rearrange loads when necessary. It may be inconvenient to move loads around by a few days, but that pales in comparison to having your product stranded as trucks sit idle during a major snowstorm.
5. Build Contingencies.
Speaking of snowstorms and other supply chain interruptions, you can prevent these interruptions from becoming true emergencies (and costing emergency rates) by having an adequate backup or “rainy day” stock on hand. Products can be stored in totes or drums on premises and shipped LTL until the situation is resolved. Your transportation provider can even help you fill an extra tank or trailer to have on-hand just in case.
Look to brokers as freight procurement allies
When you establish a relationship with a bulk freight broker such as Bulk Connection, you may find that you have less of a need to put out RFPs for your loads. Why? Because Bulk Connection has one of the largest fully-vetted networks of carriers in North America. One call to us gives you access to that entire network. We work with you to identify all key details about your load, your product, and your scheduling requirements, and then take care of the rest on your behalf. To learn how we can act as a true procurement ally for your operation, contact us today.