I was called into a potential new client meeting the other day. The executive in the meeting, while cordial, kept the conversation short, asking, “Your website says a There’s better away… Well, everyone says that, and all they end up doing is trying to beat the rates of the other guy. What makes your way better?”
My answer was simple: “Because it’s your way.”
Initially, while it didn’t appear like he appreciated my response, after a long pause, I saw a smirk on his face.
He then asked, “How do you know what MY better way is?”
Again, I responded, “Because it’s everybody’s better way.”
“And what’s that?” he asked.
I responded, “Eliminating waste before it happens, tearing down silos, and respectfully questioning sacred cows. Essentially, realizing that every organization has a root cause for their problems, and freight management is no different.”
Unfortunately, our profession in outsourced transportation management has been cheapened to just lowering freight costs.
While I am a firm believer that an affordable freight budget is a primary goal, it is not the only one.
Understanding the total cost of freight management, accounting, shipping, packaging, product value, and ultimately customer satisfaction are all important discussion items that any company interested in building a long-term relationship with a client needs to have so they can at least have a minimal understanding of what is happening and ultimately provide solutions that work.
So, you may be thinking, “This sounds like a huge undertaking. It would take up too much of your time, and you don’t have the resources to put into this… you just need to get something set up quickly.”
Again, I agree that the days of long-drawn-out implementations with moving deadlines are not acceptable today; however, taking the time in advance to build a relationship where both parties are transparent about their strengths and weaknesses will save hundreds, if not thousands, of hours of waste and costs working through problems during a shotgun implementation.
I have learned this principle throughout 35 years of trial and error, mostly in my younger years, where my desire to gain new clients quickly often cost me a lot of time, energy, and, in some cases, my reputation during the process.
Thankfully, I learned from those mistakes, and most of the clients that I worked with in those days stuck it out with me and now appreciate our current business philosophy because it typically has a very high success rate, which trickles through to our clients’ customers.
So, you may ask, “What can I plan for today?
Entering the summer, even during recessions and pandemics, there is one constant that always happens in the logistics business, and any business for that matter. It’s finding time for staff to take vacations and then finding the proper staff to fill in or clean up what is left behind after the team member returns from vacation.
The depleted workforce in the logistics business has the same issues. At one time, there used to be a pool of support folks that could fill in during a team member’s vacation with minimal disruption. Today, however, it’s much different.
On the truckload side, service levels and commitments rapidly deplete during the months of July and August, and the LTL world becomes ridden with lost or damaged freight due to the inexperience of dock handlers. The small package carriers have somewhat of an advantage, but after the pandemic, they are still struggling to retain quality, long-term-developed personnel to handle peak periods.
To make things more interesting, this summer, some major LTL and parcel carriers are in the midst of major union negotiations. If you tracked the potential rail strike less than seven months ago and remember how contentious that situation became, you should track these items as well. I always suggest to our clients to just set up a simple Google alert. You’ll get lots of emails; however, you can point them to a file and go in and review them on a weekly basis, and then you’ll begin to pick up trends.
It’s also a good idea to speak to your core carriers’ competitors, as they are typically more incentivized to get accurate information and advise you on what to do in the event of a labor stoppage.
Lastly, if you do have a solid relationship with a company that provides 4PL, 3PL, and freight management services like ours, you always have access to business intelligence and data analytics to help you stay ahead of these types of occurrences and, more importantly, have a plan in place in case of a major disruption.
Remember, it’s the relationship and transparent shared knowledge that make the execution of any plan successful, and, of course, the byproduct is affordable total freight costs and increased customer satisfaction.
Tony Ciaverelli – CEO