What Do Shippers Want from Logistics Service Providers or 3PLs? A Personal Story & 4 Answers Give Insight
I was thinking about what I was going to write today, since we do put out a blog post every day here at Cerasis. And I got to thinking about why we blog. Our goal is to create content that both educates and at the same time shows our expertise so much so that it generates demand for our services. It's a fine line between sales and marketing, of course.
As the Marketing Manager, it is my job to make sure that the content shows that expertise, but that also we aren't explicitly selling to our readers (people love to learn, but the bait and switch of "Buy this! Contact us!" is not a good experience). You may have seen that we provide content about manufacturing. We are not a manufacturer, but our customers are manufacturers. The more we know about the things that affect them, such as reshoring, operations improvement through process improvement, the economy, the skills gap, investment in technology, and more, the better we can serve them. Further, as the marketing manager, I ask myself often, "What do the readers want to read? What is of value to them?" I have to tell you, it's not always easy coming up with that.
But, in order to reach our goals of education, of showing our thought leadership, and generating demand for our services, we must continue to put out great content.
So what does that have to do with today's post? Well, I know it was time to talk more specifically about transportation and logistics, and so instead of asking "What do the readers want to read?" I thought there was an important question that not only manufacturers and distributors must ask themselves, but that we at Cerasis and other 3PLs must ask ourselves: "What do shippers want from their 3PLs or Logistics Service Providers?" Today, we will talk a little bit about that subject.
What do Shippers Want from 3PLs and Logistics Service Providers?
We recently wrote a series about the outlook of third party logistics for 2015 and beyond. In that series, in one of the posts we mentioned that there is an opportunity for shippers and logistics service providers or 3PLs to work together as partners. We went further and stated that many shippers have traded old-style transactional relationships with 3PLs for collaborative partnerships that stand the test of time. But, why have shippers understood that transactionalism of logistics service providers does not get the intended consequences?
Hired Guns With Expertise So Shippers Can Focus on Their Core
When I think about this, good logistics service providers are a lot like a good yard management guy or company. As I get my front yard replaced with all new St. Augustine this weekend, I found I've turned to an outside yard management person because, frankly, I don't have the time to give my yard the attention it needs to maintain the value of my home. I have a busy life with a lot of goals, and stopping long enough to become an expert in yard management is not something I can afford nor want to do. It would take more effort, more time, and more money through mistakes than just hiring an expert lawn guy.
Remember, I am spending most of my time playing Minecraft and making videos with my kids to get them interested in manufacturing through STEM education.
Like me, you might find an expert who helps you choose plants tough enough to thrive in your difficult climate and turf that takes abuse from kids and dogs. He recommends flowers that the deer won't eat, and teaches you to attract the kinds of birds that eat the bugs that kill tomatoes.
He does such a good job, eventually it takes him fewer hours to handle everyday maintenance. And that might hurt him in the wallet, except that the two of you keep thinking up new projects to work on together.
What's true for your yard might also be true for your transportation management needs, which is usually the largest cost center within a shippers supply chain. Like the homeowner and traditional lawn and garden service, many shippers and their logistics service providers initially engage in purely transactional relationships: the shipper buys a service, the 3PL provides it, and money changes hands.
Shippers Want Longterm Success with their "Partner" Logistics Service Providers
At some point, you say to your service provider, 'Here are my needs. What is the best way to meet them?' instead of, 'Give me a price for this service.
This was very true for me, in the beginning stages, of my "partnership" with my yard guy, Marco. At first, I just thought I needed my yard mowed. It was $25 every 2 weeks. I sold my lawnmower because I needed space. I was in for the 2 week lawn mowing for life! I got some needed time back to focus on spending time with my kiddos and wife, but was I getting all I could from Marco? Thankfully, I found the right partner who didn't wait on me to tell him my needs.
What I didn't expect was that after a while, Marco proactively got to know me. He knew my daughter's name and my daughter knew his. He then educated me and gained my trust. He started giving me little tips about my sprinkler system heads needing replaced, told me he could trim my tree in the backyard so the shade didn't kill my grass, advised that I needed to make sure the dirt around the foundation didn't get too dry and cause my foundation to crack. He even went above and beyond and explained that the original homeowners tried a less heartier grass in the front yard, but due to the shade of my trees and the landscaping set up, that the original Bermuda wouldn't work. Marco suggested St. Augustine as it would give me less work, it would sustain, and to boot, would match the St. Augustine I already had in the back yard. I truly now see him much more as a "Partner" for an aspect of my life that must get done, but that I myself cannot focus on. Now, if I had only told him my needs upfront!
4 Key Things Shippers Want From Logistics Services Providers In General
My above personal story plays well with what the experts are seeing in various studies. Late last year, DC Velocity reported on a study conducted by Logistics Marketing Advisors where they asked 200 buyers of third party logistics (3PL) services:
"How could logistics service providers more effectively engage with you when trying to build a relationship and gain new business?" As you might expect, the responses reflected a desire to hear about cost, capabilities, and measurable results. But they also emphasized the importance of the personal aspects of business relationships.
As you might expect, the responses reflected a desire to hear about cost, capabilities, and measurable results. But they also emphasized the importance of the personal aspects of business relationships.
The most interesting part of the survey asked respondents to offer advice for 3PLs that "would like to build a relationship with you in the hope of gaining future business." The research identified four prominent themes among the hundreds of comments:
- Know my business. "Bring an understanding of our products and how similar companies benefited from the engagement with your firm." This is why it's vital to collaborate and for the logistics service providers to educate and know their customers' business as well as they do.
- Give me a better price. "The providers I work with are very similar. Show me a cost differentiator." In my opinion, I want to know that my total costs are reduced. This is beyond the freight rate and speaking more to the value add.
- Be honest. "Don't tell me what you think I want to hear. ... Don't oversell with 'pie-in-the-sky' solutions." We take pride in this point here at Cerasis. In fact, our transportation management system, the Cerasis Rater, is built and developed with transparency and visibility to the entire process in mind. From freight invoice auditing, carrier relationship management, to a dedicated customer service representative for each account that is our shipper client, we believe stating the truth, no matter what is always the best policy.
- Bring innovative solutions. "We've pretty much heard all the ideas out there. Show me how you can solve a problem in a unique way." As one of the first web-based TMS on the market all the way back in 1998, at Cerasis we believe in continual improvement. In fact, it's one of our 4 core values and a huge part of our logistics philosophy. Innovation comes in many forms, process, people, and technology. From our industry first end-to-end e-commerce LTL shipping solution to our FISH! Philosophy program and leadership development programs, innovation is at the heart of everything we do.
Logistics Marketing Advisors President Jim Bierfeldt summed up how potential customers want to be treated by logistics service providers: Respect me, respect my time, respect your competition, and don't just tell me what you can do; show me ideas in action and the results others like me have achieved. And that's exactly the reason Marco and I will be "yard partners" for several more years.
What do you want as a shipper from your 3PL? Let us know in the comments section below.