This post is the second part of four in our “Best in Class Shipper” series. Yesterday we covered an overview of the 10 areas that shippers must address and understand in order to achieve “Best in Class” shipper status. In today’s ever more complex supply chain riddled with thousands upon thousands of processes, shipping freight has moved beyond tactical prowess for those who execute well and has evolved to now include strategic, innovative, and collaborative efforts to maintain not only a competitive edge but reduce overall transportation cost footprint. This series’ goal is to empower those shipping freight with more confidence. With that said, this post takes a bit of a deeper dive into some of the key 10 areas we discussed in yesterday’s post.
Before a package has even been picked up, problems may arise. Unfortunately, problems can continue well into pick up when a thorough understanding of processes and data capture is not in place. For example, some problems may be due to poor quality of packaging, receiving incorrect information about the package, difficulties with carrier pricing and agreements, paperwork problems, and incorrect management processes. However, these problems can be avoided through the use of data capture, organization, and carrier-shipper relationship elements.
Data capture refers to the ability to gather all information about a given subject. In a sense, all aspects of the journey of shipping freight are subject to data capture. However, data capture also means a given organization must ensure all data capture is accurate. In our pre-pick up problems, the first aspect of data capture—what is going to be shipped—has been excluded. This includes the product description, the pick up dates, and improper rate quotes.
A shipper must understand how vital these factors are to a successful shipment and their ongoing relationship between each other. Failure to identify correct dimensions leads to incorrect invoicing, paperwork, and rate issues. It may also lead to poor packaging when placed with other items. For example, smaller items may become jostled during transport and broken.
“Best in Class Shippers” need all of the available information about a shipment to be correct in advance. This allows for accuracy in obtaining quotes, packaging items correctly, and ensuring all paperwork and processing claims are appropriate. Now, a shipper must also consider how knowledge affects their decisions and capabilities in shipping freight.
Sometimes, the most obvious answer to a problem does not necessarily reflect the best solution to a problem. In shipping, shippers have the option of using many different modes of transportation, packaging materials, and means of communication for ensuring accuracy and accountability. However, the shipper must have a vital understanding of common practices of shipping freight. For example, does the shipper have a working knowledge of what lanes, routes, and trucks are available for use?
“Best in Class Shippers” must have extensive experience in carrier selection, routing guides, logging requirements, compliance with international and interstate transit laws, an understanding of proper freight handling, monitoring of KPIs, use of technology, and how budgeting issues may affect transit decisions. Although this list is quite long, it remains easy to manage when all parties understand the value of knowledge. Furthermore, knowledge can be exponentially increased through improved communication and collaboration between all parties, which includes businesses, workers, drivers, and customers.
For example, a shipper may need to make sure the truck arrives on schedule, freight is loaded on time and with care, and all inbound shipments are scheduled to benefit the distribution center best. Ultimately, failing to gain a comprehensive insight into the whole picture could result losing a customer due to poor delivery time frame, incorrect products, or damaged products. Additionally, not delivering goods in accordance with these best practices could result in losses for businesses, customers, and other carriers.
The next problem with pre-pick up and pick up of shipments involves the position of transportation within an organization and how it relates to other carriers. Unfortunately, failing to properly structure an organization to benefit from transportation efficiency leads to problems in the supply chain. Additionally, organization and cross-carrier relationships make a dramatic impact on how businesses of differing sizes compete.
For example, large-scale organizations may have extensive budgets for transportation costs, and smaller organizations may have a budget limitation of less than $10,000. However, maintaining organization and leadership within both companies allows them to negotiate between other carriers and freight shipping providers to gain the best and most accurate rates available. Large-scale organizations may also have larger fleets; however, these fleets may not always be full. This empty space could be “sold” to a 3PL at a discounted rate, which will generate profits for the large and small organization simultaneously.
Additionally, strong communication and management skills can be leveraged against freight shipping providers to help keep costs down. Consider how communication impacts driver schedules. If a driver is advised to pick up a shipment from Location A, the driver would expect this to be taken into account for his maximum amount of consecutive driving hours. Additionally, this may cause disruption in other pick up and delivery schedules. Therefore, the best solution would be to determine what drivers are in the vicinity with extra time to pick up the shipment. Ultimately, these two traits help to define and encourage organization and relationships between other carriers, which benefits the shipper.
Compare shipping freight to a domino-effect. If the initial pieces are not positioned correctly, the cascading events cannot take place. In order for a shipper to gain “Best in Class” status, the shipper must be willing to learn and compromise. This includes learning about other carrier practices and applying such information to each aspect of the journey of shipping freight. As a result, the shipper can effectively compete, albeit in collaboration, with other shipping providers. However, potential problems cannot be identified and managed solely during pick up. Next, we will discuss how a shipper attains “Best in Class” status through applying other elements too in transit and delivery of LTL shipments.
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