Part 12 of 22 Ways To Reduce LTL Costs That Don’t Involve a Price Reduction – Engage With Carriers to Address Issues

  • Part 12 of 22 Ways To Reduce LTL Costs That Don’t Involve a Price Reduction – Engage With Carriers to Address Issues

    12. Engage With Carriers to Address Issues

    We are half-way through the 22 Ways To Reduce LTL Costs That Don’t Involve a Price Reduction. 11 down, 11 more to go. Let’s go!

    Communication is key in any relationship. That includes LTL shipping. From the very first interaction which may be a formal RFP or just a simple phone call, to the potential final interaction which may be a price or a routing change, shipper and carrier should communicate.

    That first interaction a shipper initiates is likely to address an existing issue such as a lack of required service, a lack of capacity, or a lack of competitive pricing. The shipper is incentivized to clearly spell out the issue in order for the new carrier to properly address that issue. The shipper knows that failing to do so means the issue is not properly addressed.

    We’ve all been in a situation where we happily patronize a business like a restaurant for many years, only to have an issue arise that sours our impression. It is easy to let it stew and say nothing, or even walk away and take your business elsewhere. But if you value the relationship, its best to speak up, right? Maybe there was a very god reason for the change or action that bothered you, and understanding their perspective can alleviate your concern. Or, if they express no indication of amending the issue, you have a clearer conscious to move your business.

    Same thing applies for LTL. Engage with your partner carriers when issues arise, even little issues, so that they do not become big issues. And if they become big issues, or a big issue suddenly lands in your lap, that continuous communication shows that you value the relationship. This means the carrier can monetize the solution, and amortize it over time with confidence that the relationship will remain intact and that they will eventually recover their investment.

    Here is a good example of how engaging with your carrier can help address an issue. Maybe you are dealing with reweigh and reclass issues, and can’t afford to hire a PhD in NMFC. Your administrative expenses for paying freight bills is high, and you are not recovering rebills from your customers. You are not happy. Guess what, your carrier is probably not happy either. They are absorbing admin expenses dealing with the discrepancies, and probably are not getting paid fast enough.

    So ask about an alternative such as density-based pricing. If you ship mostly palletized freight, your carrier will likely be willing to offer you a revenue-neutral conversion where your freight is classed based upon the actual profile of weight and dimensions rather than NMFC class. There are other alternatives in the up-and-coming area of Dynamic Pricing. These alternatives can keep your invoice costs in check without hiring staff to deal with the discrepancies. And the carriers won’t have to do that either.

    With LTL, ship happens. Communication is key to keeping sand out of the gears. Elevate your ship with communication.

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