Create a Freight Capacity Strategy that Fits Your Business: 5 Questions You Need to Ask

Create a Freight Capacity Strategy that Fits Your Business: 5 Questions You Need to Ask

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hello and welcome to today's session of the supply chain master series by transportation insight i'm peter ryan in the transportation insight marketing group in today's digital event our panelists will be discussing what questions you need to ask and answer to ensure you're building and executing the optimal freight strategy for your business before i turn the program over to our panel i'd like to mention one housekeeping item if you have a question during today's session and we do want your questions please type it into the questions pane that you see in your webinar viewer we'll respond to as many as possible during our broadcast let's jump right into our conversation today first i'd like to welcome melanie burns to the program melanie's been in the logistics industry for 15 years helping clients engineer optimization strategies help reduce logistics-related expenses and drive compliance she has experience working in brokerage and for a large national asset based provider with positions ranging from operations to providing consultative solutions to clients she brings a well-rounded perspective to our conversation today welcome melanie thank you peter i'm looking forward to the conversation today and discussing the complexity of the freight market and some areas that shippers can be considering when putting together a great strategy and of course i know you're about to introduce pat but looking forward to having the conversation with pat because i know he'll keep it lively as we go through that's the truth the other half of our panel pat allen has spent 14 years in supply chain primarily focused on transportation efficiency and cost reduction years working in both the transactional and collaborative brokerage situations have helped him understand different methods of interacting with the carrier community from the perspective of myriad unique shippers and shipper strategies he also carries a certified supply chain professional designation from apex and he's an active member of the cscmp of eastern michigan roundtable welcome pat and let's go ahead and jump right in here awesome thank you peter for the introduction and uh the personality comment i'm looking forward to keeping the energy high and uh talking with you melanie so i can't wait so again thank you for everyone that's on the line for joining uh melanie and i obviously we've had some conversations leading up to this uh but we're both incredibly excited to share some strategies and really considerations of of what we need to do to navigate what is a ever-increasing uh complex market so with that uh when thinking about where to start from for setting your carrier or your freight strategy there's a lot of different things you have to think about most companies start internally they look inside their four walls to figure out what they want realistically though it makes a lot more sense to start with what's out there what's available in the marketplace what does this marketplace look like so what you find is a marketplace that's significantly more complex than many shippers think it really is so uh between uh let's say the department of transportation says that there's somewhere between five hundred thousand and seven hundred thousand individual fleets operating in the space today and this is primarily from a truckload perspective so then but really when you dig down a little bit the fmcsa has eliminated all the carriers that didn't log any miles and that don't have any registered equipment so what you come down to from the overall marketplace is really about 225 000 for higher carriers in the country interstate carriers in the country so that means you have 225 000 options and about one and a half million pieces of equipment that could potentially be your perfect fit from a truckload perspective so thinking through that a lot of large shippers and really even smaller shippers think okay well the majority of that capacity must be housed in those mega carriers the night swifts the jb hunts the schneiders things like that and that's not necessarily the case they don't even those large carriers don't even represent one percent of the marketplace 99 of the fleets have fewer than 100 trucks and the average size of a fleet in america right now is six trucks so think it through 225 000 fleets and that that large diverse carrier base of the small call it owner operators or family-owned trucking companies uh it really gets quite complex and how we're dealing with this and when you shift that instead of just looking at the number of fleets to capacity because of course those mega carriers have over 5 000 pieces of equipment still 60 percent of the available capacity is housed in fleets that are fewer than 20 trucks so if you're only going to those mega carriers you're really only looking at about 10 percent of the addressable marketplace so thinking through you know how are you going to engage what makes sense how many carriers can you support can you utilize these are some of the questions that we're going to answer today but think it through the truckload market and how complex it really is and how many choices there truly are really should impact what you're doing going forward and melanie i know you wanted to comment a little bit on specifically uh more in the ltl and parcel area yeah i think that um so you know truckload just like you mentioned definitely is very complex marketplace to consider um with all those those players involved the the large carriers the regional carriers but when you think about lcl you don't really see the market as diverse as you do with truckload 70 of the market share is held by the top 10 ltl carriers so you know when you look at the lcl carrier number there's about 200 ltl carriers in north america but again you've got those big players that are making up that large majority lcl does get complex however when you start thinking about the carriers that serve the marketplace so you've got national carriers you've got multi-regional you've got regional and then sub-regional and you know start thinking about how and which carriers do i engage and how do i engage each of those carriers is where it starts to get a little bit more detailed and understanding your business needs and how you align that and so it's important that you understand from these different ltl carriers what their coverage is what their pricing is and how your product aligns to their business and their operating performance because that's what they're looking at when they look at pricing your business and how they serve your business um and then of course you're going to want to understand what is the service that you're going to receive from each of these different carriers and taking all that into consideration when you're looking at aligning to different ltl partners and so you know when you look at parcel you know you're making your way down and you look at parcel um it's completely opposite of what you see in truckload right you've got big players with fedex ups and the postal service and they're handling the vast majority of the parcel volume but you do have regionals as well that you can take into consideration throughout the u.s based on what your business needs are and you know recently i read an article in supply chain dive that said especially this year um at the beginning of 2020 there were about four percent of shippers that were utilizing those partial regional carriers and when you look at around march it jumped up when you when you started because it hit that number jumped up to around 19 of shippers so more shippers were diversifying out and starting to utilize those relationships and then now um with the volume caps that have happened over this year by fedex and ups um you see that number trending at 30 so you know really understanding where you have you know with all modes here truckload lcl parcel understanding where you have strong relationships maintaining those but then also seeing what else is out there in the marketplace understanding those those carriers and how you can look to diversify is really important and so pat i know um you know we talked about each of these but didn't even touch on the additional capacity that's available with brokerage and so um i know you've got a lot of experience there so love to hear your your input on the brokerage side of it yeah absolutely and i'll touch on that in a sec from a from an ltl and a partial perspective i i hope that those on the call are truly understanding that each one of those modes is complex in its own way and they're significantly complex and that that complexity should definitely help dictate what that carrier strategy is so great job kind of breaking down especially the emergence of regional carriers in a partial perspective with that said for the audience out there we're going to concentrate mostly today on freight we're going to leave parcel kind of out of it because uh the the topic for the webinar today is is primarily focused on freight so if we don't touch that much on that that's why now under the brokerage you're right we talk about how complex from an ltl perspective from a truckload perspective even parcel but then those are all complex in their own on their own now if you start interacting with a brokerage and basically filter all or part of your transportation through a broker that puts a whole other level of complexity onto that and it impacts relationships and negotiating power and really service levels and expectations and contracts so uh there's the marketplace itself is significantly complex and made more complex by brokerages and not just you know your larger brokerages anyone with 75 000 and the ability to fill out some paperwork basically can start their own brokerage so they can be a useful tool when you're looking for capacity particularly in the spot market but understanding the benefits and drawbacks of brokerage as a whole in individual brokerages is a big consideration when you're talking about going out to the marketplace so we talked a little bit you know we wanted to set the market snapshot we wanted to set this the stage of who it is that we as shippers are going to be interacting with but now we're going to start to get a little bit more not quite internal yet like i said most shippers think about you know who am i who are we what do we do when really supply chain over the last 5-10 years has really shifted to be less about what you're doing and more about what your customers need and what your customers expect so the first thing after understanding what potential partners there are out in the marketplace you need to think about is what your customers expect from you because those customer expectations are everything to your business if you're meeting or exceeding those expectations your business will grow if you're not meeting those expectations your business is going to contract and that's not any not something that anybody really wants so we'll talk a little bit about you know the the characteristics of your customer base and how their expectations and what their characteristics are impact your strategy so first of all and the most obvious one is geography where are your customers located are they located all within the united states internationally regionally just within a specific state and it's not just where within the country or on the globe that they're located but in what type of environment and what type of surroundings are they in downtown chicago new york city which has its own challenges as far as delivery goes or are they like a customer that i used to work with in a previous life that made chicken processing equipment feeding watering processing equipment for poultry there's not a lot of commercial farms in downtown chicago or new york city these big commercial farms that are buying this client's product are located really in the middle of nowhere they're located in rural iowa rural nebraska so it becomes conversations about okay i'm going to have a different strategy maybe the larger carriers don't want to go to you know these rural areas that are far away from most of their customer base maybe you have to lean on some of those smaller providers that we talked about before that's going to make a big impact now size melanie how can a customer's size impact what you're doing from a procurement perspective well so i think you have to look at it in a couple ways right you want to understand the overall size of your customer as a business in understanding um what what percentage of that business that you own and then you also take that to look internally of how big is that customer to your business portfolio so you know is that are they a large customer for you and are they gonna drive the strategy for how you go to market um you know what would you do for your top three customers but then you also have smaller customers that you want to think about as well and start to think about do they fit in line with how you're going to go to market for your large customers is it different um and are you going to make exceptions for the smaller or just the larger customers and so that's really you want to look at it from different perspectives on the size of that business and pat i know that service expectation is obviously important customers have different ways that they're looking at the service that they expect from you and so i'd love to hear what you've got to say based on you know how we need to look at that how are how the people in the audience today need to be considering it yeah absolutely and you made a great point on size and you know how you could have different carrier strategies based on different size clients you could have a different carrier strategy based on nearly any of these requirements where they're located how large they are what they mean to your business all those things so keep in mind that sometimes the carrier strategy can involve a bunch of micro strategies underneath it so to that end service expectation we talk about what your client's expectations are now if you look at our super high quality graphic down at the bottom and we call that the the quality triangle so cheap fasted good pick two right i think most of us have heard that uh and that's really what it is in transportation largely so if you're if you expect a high level of service and uh high quality or at a very fast high level service well you're probably going to pay through the nose for it but if that's what your customers expect that's the strategy that you need to set so thinking through that you have to think through your client base and what their level of services are you sending let's say lumber which is relatively commoditized and most of the time these folks that you're sending large amounts of lumber to probably have some flexibility they're going to be more price focused because it's a commoditized cell so you're going to be very price focused on what you're doing from a procurement perspective if you look on the other side of that spectrum i've got a client right now that makes chilling or cooling machines and these are very sophisticated machines used for a very specific purpose and they're calibrated as such that they need to be handled with care or else they're not going to work so that service expectation is the primary focus for them so as we work with them to set that carrier strategy we need to make sure that we're relying on carriers that are known for higher service even if that comes at a premium from a price perspective so that it might be different depending upon you know who you are and what your clients expect and it could be different if you have different uh commodities that you're shipping so yeah and i think you know pat i um especially right now one big area is e-commerce right um and so when you're looking at e-commerce the the service and the speed are key i've got a customer that i'm working with and they are primarily e-commerce and they know it's important for them to get their products timely to the customer with the service required and they're even they scorecard themselves on the net promoter score and so if their customers are not getting their delivery in the time that they expect it with the service that they've asked for and they've paid for it's going to be known and so it's very important for them that that they have to be flexible in the price they don't want to get gouged by the marketplace but they also know that that sometimes they've got to be flexible to make sure that that service and speed is met so um i definitely think that that you see it from all different angles right and understanding your customers and their needs and the differences of them is very important um and i think another thing too is that your customers when you think about service expectation it really can go into these two additional categories we have here a vendor requirement and order methodology um you know some of your vendors i mean your your customers are going to have specific requirements for you maybe they have a specific carrier that you can utilize um and they only want you to use that carrier so you need to keep that in mind maybe there are a certain delivery requirement that they have from you that that you need to be able to service for them so they're going to have specific vendor requirements that you need to take into consideration when you're planning out your strategy and then when you think about order methodology um you know do you have a customer that gives you a consistent order with notice to where you can plan for that with carriers and have more contracted rates of carriers and work with more asset-based carriers um or do you have a customer that orders and expects you to deliver it the next day within 24 hours and so that doesn't really give you much notice to plan and you need more of a flexible strategy there and carriers that can ebb and flow with those needs and so um you know really understanding the way that your customers put um how you're going to service them and and what their requirements are is going to be really important and then pat with combination of that is is there flexibility right so um i think that that's key for all of these last three service expectations vendor requirements order methodology are your customers flexible and can you start to work with them to to make it to where you can have a more defined strategy um you know that's that's a big key do you hear that a lot with customers pat that that they're trying to figure out how to be flexible and service the needs of their customers yeah it really one of the greatest things that i've experienced you know working with clients here at ti is the conversation we get to have once we you know in every engagement we'll set a carrier strategy on the front end but then as we're starting to dig a little bit into the operational data and what's happening and where there are opportunities for improvement is the customer conversations that are had between our customer and their customer it's hey right now you're telling me i need to ship you know those vendor requirements i need to send this with fedex every time it's got to be fedex and you guys have to pay for it well now we're starting to get into some intelligence where they're able to say hey if you guys are flexible and you allow us to use say sds instead of fedex we can cut your per piece price down by five percent now the customers are starting to say oh you mean i could save five percent or i could get five percent more product for the same if i just have one more carrier in now it doesn't always work perfectly it doesn't always align with the business goals but being able to talk to your customers about that flexibility and from a financial or service perspective what that impact is by changing carriers or changing strategies or changing their desire their service level their speed etc it can make a really big impact not just on your sales but in your customer relationships and as we know the better off or the better your relationships are with your customers from a customer service perspective not even necessarily a supply chain perspective uh the more beneficial that relationship can be for your business and for theirs so yeah and so and that's you know definitely um a good segway because you know when you think about that customer service and their needs that's obviously important and that's why we looked at that first we wanted to really focus on um your customers are what makes your business right and we need to take into consideration what their needs are and that you're you're aligning that strategy and so you know as a shipper you're going to want to also look at who are you what are your own business needs what's your business profile and internally understand what those business requirements are and what that what's needed to be considered when you're putting together this great capacity strategy and so the top couple here are the same as we saw in the customer right geography and size they're just as important when you're looking internally in your own business you need to understand where you're located are you regional are you national are you international and or are your customers that you're trying to serve your network is it international and you want to make sure that you are working with carriers that can service those needs but it's not one size fits all you don't necessarily want one carrier that can service international but you also may have a regional too so you want to be able to be flexible and really diversify those relationships to cover um the geography that you have as a business and you also want to think about the size right your the size of your business informs your partnership and so you know a lot of the times i'm talking to clients and they want to really work with companies that look like them um they want a company that's similar in size they want to understand who um us as as the vendor as the carrier they want to understand what size customers we work with because if you are a lot of times a smaller company and you're working with a really large company you may be a smaller fish in the pond and so you just want to make sure that you're understanding the size of your business and how it aligns to the carriers and but on the flip side of that you know if you're a small shipper and you're not able to leverage your sends maybe it does make sense to work with a larger company that can help you leverage that spend and help drive down your cost so there's a lot of things to think about when when you look at geography when you look at size that you need to consider in the marketplace and pat i know you know we have these conversations a lot of times with clients um any any examples that you would you would add to and give to our audience today yeah i mean you think about it and you kind of mentioned it business is changing 20 years ago was how can we win right it was always about winning and now it's more of a win-win we want to try and find partnerships that are going to be beneficial to both sides because that informs service the happier each side is in a transaction whether it's for transportation or whatever widget it is that that your product supply or your company supplies it's going to be better off so thinking about you know how different things can impact um you know really what we're talking about here both in size so regionally you might have more than one strategy melanie mentioned you know just because you ship internationally doesn't mean you need to partner with just an international transportation company or you don't need to find just one company per se that can do all the different things you have you may have different strategies maybe you from an ltl perspective you have a national carrier that that takes care of you know maybe the west coast if you're up if you're operating in the midwest and then you've got a couple of regional carriers that'll support your business in the northeast and the southeast so thinking through that you again can have different strategies for different regions different client bases different customers and even different products uh is pretty significant and that kind of pulls me into what your product is what industry are you in because industry there's certain carriers especially on the ltl side certain carriers that concentrate in certain businesses some are heavier in food and bed food and bev some are heavier in automotive so if your industry aligns with one of those carriers it probably makes sense to interact with them because they've got some experience and they've created some efficiencies there of course industry as a whole you know what your product is if you have you know you may have different skus or different product families that need different service levels so if you have your your low cost widget on this side you're dealing with these carriers and your high cost widget more quality widget over here maybe you need to have a different carrier strategy for that so really it is again continuing to look internally um to figure out you know how to support that so seasonality we always talk about pro oh did you have something to add in the industry yeah yeah i was going to say well it kind of tied to when you're talking about different products um in different seasonality right it ties in with that i've got a specific client that i've worked with who you know they've got a lot of locations throughout north america but they're also different business units and so they've got multiple different products that they have in their locations they also have one that's very seasonal and so they have to look at it with different strategies they need to look at one of their business units who has more consistent business um one way and then they're seasonal i mean for out of three months out of the year they have huge spikes in volume but don't really ship much outside of that season and so they really need to be able to support the capacity with that three months in a completely different way that they would support business units that have year-round volumes so those are definitely things to think about when you're when you're looking at products but you're also thinking about that seasonality too how do you support that that surge in that high volume season but also keep those relationships constant throughout the year so um definitely a lot to really be looking at internally with your business your path yeah i'm picking up that there's a lot to consider when putting forth a procurement strategy um two of those things when you're looking at what you have of course it's where you are what size you are what industry you're in the seasonality all that but two of the foundational aspects of how businesses execute really anything but definitely in the supply chain are technology and talent from a technology perspective what are you doing to support your transportation today do you have a transportation management system do you does your erp system have some kind of bolt-on that will help streamline transportation um are you working via phone and email right now is that just kind of how you're interacting with your carriers understanding where you're at is going to inform what you're doing going forward for example if you don't have maybe the ideal carrier strategy for your business is to deal with a thousand truckload carriers now that sounds crazy but there are shippers out there your coca-colas your amazons that deal with thousands of carriers now they have technology that can support that you might not so your ideal carrier strategy is not ideal for your business if you don't have the bandwidth if you don't have the technology to support having that many interactions with that many unique carriers on a daily basis you're just you're going to set this carrier strategy and you'll have no way to execute it so think through what execution looks like from a technology perspective and supporting that technology is built to allow your talent to be more efficient now how many people do you have that can impact transportation and supply chain both tactically operationally and strategically what are their roles how what is this going to mean if we have one carrier that we work with can we support that 5 10 25 50 what's that sweet spot with the talent that you have and their capabilities and bringing it back to technology what kind of i.t resources do you have if you want to institute some sort of technology do you have the i.t people that can help build out a transportation management system or create some kind of a surrogate a proprietary system that can support that or does it make sense to buy it now there's a lot of things to consider about once you set that carrier strategy what to do on the back end we're not going to get too far too deeply into that but melanie i think you had an example about how technology and talent kind of works in um with with the current client how that looks today yeah so you know i think that with this specific example because this client didn't have the technology they didn't have a logistics team or the staff to support that you know for them they they kind of thought well we'll just use one carrier and give 80 percent a little bit more than 80 of all our business to one carrier because it's the easy button it's all we can do right now we we can't take the time to invest in technology we don't have the staff to support the execution or really looking at this strategically but but really you know there are other ways to look at that as well even if you you don't have the technology you have a limited staff you can look at some additional carriers that can still be managed for your business and so you know what we did with this client is they still even with some of our help their business is not changing they weren't adding additional people to their team so we were still able to help them identify um you know how can we add a little bit more competition to this what additional carriers can you utilize um that still cover you but gives you two or three additional for additional competition um and also execute because they only had a limited amount of dock space so they had to be able to not have too many carriers for that part as well but then also how can your team understand which carrier is the right carrier to use in what circumstance and so providing some some help there on the procurement providing some technology for visibility was a good way to get them started to where it really helped them drive down their costs about 18 so just adding additional to a couple additional carriers really drove that down so just considering some some different ways that you can look at it even if you are smaller and have that limited uh resource internally um yeah that's that's a great point i mean introducing competition is always a good way to drive down costs or create some accountability in the carrier base uh so yeah i'm glad that worked out and they saved 18 that's a significant save so we're going to stay internal here but we talked about these things from a business perspective big picture but now it's okay what are we doing right now we know who we are as a business and how we're interacting and all that stuff but what's the strategy today and i think the first thing you need to look at is what your relationships are with your carriers because that's going to inform how you interact are you very adversarial with your carriers is it always constantly ah you didn't do this or you didn't do this or we need to drive down price or increase service that's okay some businesses that's just how you need to work especially those commoditized businesses when you get a little bit more specialized or your expectation is a little bit of a higher level of service maybe your relationship is better with those carriers is more of a partnership as opposed to a transaction and that's going to go a long way in determining if those carriers are right for you going forward so you need to audit those relationships make sure that you know hey if i call you know bob at bob's trucking office at midnight is he gonna come and help me out yeah okay great that's a really good relationship if i have a need for that type of thing so the relationships with both you know your ltl and truckload companies are going to be very instructive in what you're doing going forward yeah pat i you know being on the the carrier side of it um you know working on in for a brokerage and also working for an asset-based carrier this carrier relationship portion is really important um you know the more the carrier understands about your business and your business needs the better they can serve your needs and the more open to conversations like pat talks about that you can have with your carriers because they understand you better a lot of times i would receive um pricing requests whether in a formal rfp or i'd receive it in a more quarterly pricing you know every customer every um shipper has a different way of presenting those that pricing strategy to carriers but a lot of times it would be without much additional information and so it's really hard for the carrier then to understand how do i how do i see this business what is the the pricing need to look at look like for them and when there's an unknown a lot of times that gray area just results in increased price and so the more you can have a relationship with your carriers and explain to them your business your business needs maybe it's a project and you're asking for a quote for it but you don't give them any information about the project these are really important things that carriers love to have and they also know where they stand with your business so i think carrier relationship is great and then it really kind of starts to drive that pricing strategy to that yeah it's it's a huge to have that partnership and that transparent partnership between what the customer desires versus what the carrier desires the ideal situation is you align both of those things both from a market perspective pricing perspective and service perspective you check those three boxes for the carrier and you're going to get a good price and good service so yeah that's a great call and i'm glad you brought that experience to bear we talked granted this whole thing is kind of in pricing strategy but there's different methods of pricing you you mentioned one of them right you're getting rfps a lot of the most common is a yearly rfp and that's just kind of always been the standard in the industry now i think that's changing a bit more to your micro bids or maybe monthly bids quarterly bids like you talked about but having let me tell you this so there was a study that mit did about the marketplace and how pricing truly impacts transportation related service and what they found was of course if you're significantly under market from a pricing perspective your service is going to suffer you saw they saw a significant reduction in service the further and further below market you were no one's super surprised there obviously average price equals average service but what i found most interesting is that those customers that were playing paying a premium to market especially a significant premium to market they didn't really experience that much better than average service so really what that means is you want to try to follow the marketplace if you're more of a commoditized shipper sure maybe you want to try to be a little bit below the market because service isn't quite as ex as important but if you're average to specialize just because you pay 10 15 20 over market average for price for transportation doesn't mean you're getting 10 15 20 better service so the goal is to try and meet that market but always buy at the market in the year like 2020 you think about what the market's done where it started kind of here and then it bottomed out and now it's spiking a year-long rfp is going to be way too high and way too low and everywhere in between over the course of a year so again this kind of goes back to talent and expectations and partnerships but really if you're gonna operate your business in an rfp manner maybe it makes more sense to do some micro bids or smaller bids throughout the year maybe bid out a facility every quarter and then a different facility every quarter just to try and follow that market rate a little bit more closely that's something that it makes sense to consider and that's definitely more for the truckload when we're talking about a truckload rfp but of course your business might not lend itself to consistent lanes at all so an rfp might not work then you're working in the spot market or you have a hybrid of the two or your business is so regular that you can dedicate this to a specific carrier so there's lots of different methods of pricing and lots of different partnerships that you can have with carriers and brokerages in the truckload melanie i know you wanted to say something around kind of what pricing strategies can look like from an ltl perspective and what to consider there yeah so i think you know you a lot of times with ltl carriers are going to be contracting directly with them there is you know the partnership that you can have with brokerages too to help leverage your spend through their spend but when you're contracting directly with ltl carriers you've got your contracts that you can compare to one another right and understand what they look like but then you need to think also about the accessorials and so how do they aspectorials line up with each carrier and so if you have products say long product and you're going to look at have a lot of over length accessorials that's something you really want to pay attention to because that really could differentiate which carrier you work with and it may be an oversight that you don't realize that one carrier has a much higher pricing uh adversarial than than another and so definitely think about you know those like we talked before your business requirements your business needs and how the full pricing strategy with those carriers can can line up to it so um i mentioned briefly the ltl side of it but you know that's that's a different way to look at it as well right yeah and it just made me think so the chicken processing company that i alluded to back at the beginning of the call um we had maybe i think it was a five to six percent save on on tariff ltl pricing but we saved an additional 25 because a lot of their equipment was over length and we didn't even analyze the impact that different over length charges would have as we had negotiations with these carriers so it was a significant uh decrease by looking at acid soils when really a lot of times people just think oh this is just this is just going to be the same no matter where we are we see that a lot in a partial space as well um so think it through then we move into execution right we talked a little bit about technology but think about today are you blasting an email out to all your different carriers to get things back are you do you have a tool do you have a book that has pricing so you can calculate your pricing what does that look like how are you interacting how do your carriers know they have a shipment how do they confirm that they can pick that up if it's all email again that thousand carrier strategy that might be ideal that's probably not realistic but if you do have a tms that opens up your ability to deal with different carriers and how that pricing lives and how you interact and get that pricing and really understand and communicate with the carriers take that even into tracking and what that looks like and then some of the back-end functionalities from an administration perspective and a tms uh there's certainly different things that can that can impact your business positively yeah and i think too you want to consider if you do have a tms or looking to implement a tms how is it configured is it configured for your specific business needs or is it lacking some of the requirements that are going to help you streamline your processes so a lot of times people i've talked to a couple companies recently that both kind of had the same issue they within their cms they weren't able to see the pros for their lcl carriers and track and that's a pretty big advantage that you could have to streamline processes and so making sure that that you're working to add the functionality that you need or you're looking at relationships with partners that can provide that to you is important so um and then you know pat i think overall um one of the things that you and i talked about that's really important is measurement how are you measuring today um your current state how are you managing your current carriers today do you have the tools to really um see how they're doing from a service perspective or what is their their claim ratio look like um how are they doing uh trending for a price per pound or price per mile and how can you compare the different carriers that you're working with today so being able to measure the relationship being able to measure the service the the pricing trends is going to give you better visibility to where you can really start to um fine-tune those relationships and identify are there areas where um we have one relationship with a carrier that we might need to replace and so that really will give a line of sight to how you can move forward with the current state that you have today and so um go ahead pat you can't fix what you can't measure so so many times i'm having conversations with supply chain executives vice presidents and whatnot and they say oh well psy is terrible and i say okay well why is that well bob on the dock says we have so many problems with them okay and then what's interesting is once we get kind of to the end it was bob had a bad interaction with you know the terminal manager or something at one point he doesn't like them so now every time that they miss a delivery or maybe have a claim bob is all over it he's making noise through the organization we need to get rid of saya when if you actually have technology and information in place or a system in place to truly measure what's happening you might find out that really they're at like 95 positive service experience so you can't just take one person's word for it you have to truly have a system to measure that because again you can't fix what you don't measure so yeah we talked a bit about yeah well thank you it's i love it's one of my favorite sayings the other one is that's the way we've always done it the seven most expensive words in business i've got a few sayings yeah that i really like anyway so that's really what we're looking at you can't fix what you can't measure now did you have anything to add on that mel well no no i was just gonna say that's important um and and kind of get it to where we you know we're kind of throwing all this out you all we're talking about the marketplace we're talking about your customers look at them look internally um what you have currently where are their strengths and where can you drive value by potentially changing things up but really you know the big question now is how are you going to engage the marketplace and um so pat i know a lot of times shippers have to take into account what you discussed earlier with you know the ability what technology you have today and what talent you have internally and that is this something that you can handle on your own or do you need to look out or leave to get support for it and so um pat i know that you actually had a whole separate webinar with liberal a couple months ago where you talk specifically to this beginning to look at um is this something that we can insource or is it something that we outsource so i know you have a lot of good uh points from that webinar that you can bring to the audience today yeah i mean it's there's a lot of echoing in this conversation as opposed to that one it's it's just you have to make a conscious decision that this world is complex and what you do as a shipper is very complex and you have your own unique drivers and how that business works of course you're going to have a ton of insight on how that works but if you only have so many people on your supply chain team and really they only have so much experience which probably is all within your very specific industry if if that aligns very well with what the carriers need and it's a very specified industry well great maybe you can support that strategy because of that experience but if it's a relatively traditional supply chain even or if it looks a little bit complex partnering with someone else that may have other experience could bring some value and hey we've seen what your competitors are doing or we've seen what people in these industry adjacent or industries that are adjacent to yours are doing and we have some strategies that are doing that maybe it's something that that you and your team have never thought about so that's one thing just from an experience perspective but then we talked about talent and technology before if you need 10 people to manage your transportation team and you only have to manage your transportation and you only have five people well then it doesn't make a lot of sense to try and internalize that because you're going to burn out or you're going to need to hire significant amounts of people but you have to be real with yourself if you have the capability to do this and then do this correctly so check it out it's on transportationinsight.com click around you'll find the video it's me and librel and if you're curious of whether or not it's similar to this things you need to consider when deciding whether to insource or outsource so those are those are definitely things to keep in mind now what is define your go to market strategy seems pretty simple but i bet you have some insight on that one well and i think it actually you know i have a customer that i worked with that really kind of faced this enforce versus outsource um but also it was just trying for them to define that market strategy so they had um consistent business high volume truckload where they could have had contracted rates and be working with some asset carriers and then also have their partnership with brokerage to fill in the gap but they weren't able to do that because they had limited resources they only had you know a couple people on their team they didn't have the capability to put together a strategic rfp they didn't have the ability to onboard new carriers and so really what they were doing is working with five brokerages with one of them handling about 60 of the volume so and and you know brokerages definitely play a role and they support business and they give a lot of capacity but when you are able to look at your business and understand where is you know like we talked about earlier where are the consistent lanes where do you have density where you can partner with asset-based carriers or with brokerages with contracted rates that limit some of the volatility volatility that you have within your transportation spend throughout the year and then how do you look at where some of those lower volume maybe smaller customers maybe one-off shipments that an asset-based company is typically not going to want to handle for you or if they do it's going to be at a premium and really starting to put together that that that go to market strategy for your business and so that's really kind of more of a truckload example but it kind of intertwines right there between the enforce outsource and that go to market strategy they were kind of working on those together but they couldn't really execute with the way that they were doing it today yeah absolutely and i i know we're getting tight on time so we'll fly through the end of this here pretty quick uh because i'd imagine that there's some folks that have some questions so we want to make sure we get to those but you know we've talked about execution a number of times how do you plan on executing today if you don't have a tms but you think your carrier strategy is going to need a tms to support it maybe you should start asking some questions about how you can better execute and do that more traditionally it's can you execute truckload and ltl in a tms uh there's there's different is it how are you operating truckload in that tms is it based off of a routing guide so you have a tms that can support doing it that way is it based more of a bid board or a spot market where you're promoting that competition on a per shipment basis to drive down those costs there's different ways that you can utilize these tools now ltl works a little bit differently in the tms world did you have a note on that well i was just going to say if you're not utilizing a tms right and you've got lcl you want to introduce some additional carriers understanding those carriers what markets they serve and and how you can execute outside of a cms that's going to be streamlined is really going to be key so you can do it um you know execution doesn't only have to be through tms but find a strategy find partnerships that work for you that you still can handle without the technology and and have con if you don't know what works for you have some conversations with tms providers or 3pls or consultant based people like us to determine you know what works for you you know we're most salespeople are out there to help so that's certainly a role that we want to take so we talked about measurement you can't fix what you can't measure whatever you do whatever that strategy looks like figure out what's important to you and measure it so you can make decisions to change that strategy in the future that's probably the biggest part just because you set a strategy today doesn't mean it's going to be the right strategy a year from now markets change carriers change businesses change the global health climate changes there's so many changes that happen um and you you have to be cognizant of the fact and have information that'll inform these changes going forward so with that i think that oh sorry go ahead well i was just going to say pat that's a you know a great um when you're measuring that performance you just you're able to really start to look at things and not have to start all over right you don't have to restart this every year or every few years um you can just build on it and reevaluate how you're doing things today if you're measuring so that's that's the last thing i'd add absolutely and and before we get to questions just so everyone on the call truly understands you know kind of where this is coming from everything we've talked about today are things that the transportation insight talks with our clients with every day 99 of our engagement start on that carrier strategy and how to effectively start a carrier strategy what are you doing today that's working oh that's working well let's protect that but here's some ideas to support that how are you executing today okay well let's figure out the best way for you to execute the strategy that you just designed and then we have measurement tools in place we need to measure to make sure that the carriers are doing what they're supposed to be doing at the pricing that they said they were going to do it in so if they're not we're going to give you information to allow you to have those conversations with their customers and then finally on the back end you talk about true measurement now we're talking about metadata and business intelligence and taking this data and disseminating it down into dashboards that are going to help you inform the carrier capacity going forward hey carrier x you're not doing very well you need to do this better or maybe we need to go a different way and then you can even go to the next level and start to find opportunities to create further efficiencies and really remove miles and shipments out of the supply chain so big picture that's what ti wants to do if you have questions about your carrier strategy or considering changing it or want to know what's out there for execution please reach out to melanie and i uh and we'd be happy to have these conversations with you so with that peter i wanted to to toss it back to you i i would imagine there'd be a question or two out there yep thanks pat we do have we have had a couple of questions come in and as a reminder to the audience please don't hesitate to enter your question in that questions panel on your screen if we do not get to our to your question we'll we'll address melanie and pat with these offline but the first one that came in um i'll address this one to you pat according to everything i'm reading these days we're at or near the high of the high point of the transportation market in pricing as capacity has been an issue in many modes what does what impact does the marketplace have on if and when you should review your straight freight strategy well that's that's a great question and and the easy answer is it depends um but you think about so that goes back to that mit study right where you always want to try and be in line with the marketplace so the market might not have as big of an impact on when to go to market as you would think because you're never going to be able to predict when the market's going to go up or down so really you always want to try and follow that market pricing so yeah a lot of people don't want to try and renegotiate at the peak of the market but if you take the strategy of coming up with some mini bids then you have the opportunity yeah you might be high today but a month from now or two months from now if you do it again and pricing comes down you're going to be able to to change your strategy and keep pricing right in line with the market so your service expectations or so your service is where expectations are good insight thank you for that pat i've got another one here um and i'll toss this one to melanie so would you follow a similar process for engaging the marketplace when it comes to parcel shipping or should you look at that process differently because of the limited number of service provider options available well so i think that you would look at a process that's pretty similar to what we've outlined here um you'll want to focus on who your customers are are you direct to consumer or are you more b2b servicing commercial business customers and so that makes a big impact on that that triangle that we talked about of speed and service and price right and how you're going to look at that you'll also want to look at your internal business requirements as well and understand things like if you are delivering direct to consumers if you're in retail how do you fulfill orders to your consumers how do you get closer to your customers to fulfill them and meet that speed requirement do you have your locations in the right spots and um are there other strategies that you can put into play like buying online pickup in store where you can really start to serve those customers differently so really understanding that geography and size and what your capabilities are um and then i think you have to still evaluate how you're doing things today just like we talked about can you work with some of the regional carriers and really start to have the the tools where you can start to measure just like patent i've talked about this entire time of um how are you doing things today what are the cost drivers within your program how are you measuring to improve upon those and can you pinpoint those so you can see the trends within your spend um because with parcel you know it's a little bit different with the annual gris you have but then you also have all the different surcharges throughout the year so being able to have a tool that gives you visibility to that to begin to measure it and to make changes to your strategy throughout the year is really important all right well thank you for that melanie and thank you to both melanie and pat for sharing their perspectives today on how best prac what best practices shippers could should consider in the development of their freight strategy to our audience uh if we didn't get to your question we will follow up directly with you or feel free to connect with our panel panelists using the contact information you see here on the screen to learn more about how transportation insight solutions can help you solve any number of supply chain challenges please visit our website on the resources section you can access previously aired digital events along with a full library of insight from our deep bench of subject matter experts also be sure to visit and subscribe to our blog and follow us on our social media platforms whether your business is large or small transportation insight supply chain solutions can help you control cost manage risk and improve your customer experience on behalf of our panelists and all of us at transportation insight thank you for joining today's broadcast may you master the remainder of your day

2021-01-09 23:17

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