The logistics industry faces another challenging year in 2022 as supply chains navigate shipping delays, labor shortages, and production shifts. However, there are steps manufacturers, distributors, and retailers can take to reduce costs, mitigate risks, and keep products moving.

1. Prioritize Carrier Relationships

Get drivers back on the road faster. Fast check-ins, reduced paperwork, and contactless digital payments keep drivers moving and decrease waste. Efficient drop trailer management and yard workflows also reduce unnecessary bottlenecks.

Provide a VIP experience. Establish a policy with staff members that emphasizes treating drivers with respect. Provide easily accessible restrooms and make sure they are serviced regularly.

Reward top performers. Measure KPIs like primary tender acceptance, spot inflation, and on-time delivery to identify top carriers per lane. Offering exclusive, pre-bid opportunities to best-performing incumbents or even higher rates on well-managed lanes can incentivize those key partners to go above and beyond when markets tighten.

2. Select Transportation Partners Strategically

Diversify truckload and last mile providers. As shippers shift distribution networks, they must build out reliable carrier networks to handle new shipping patterns. It is important to select the right mix of large asset-based providers, regional or niche providers, and brokerages with access to scalable capacity. For last mile shipments, many retailers are adding regional, local, and crowd-sourced carriers to their traditional mix of providers to ensure capacity, reduce costs, and limit delays. 

Seek an end-to-end solution. When possible, hiring a single-source logistics partner to take shipments from manufacturer to warehouse to end customer can create numerous efficiencies. This holistic, integrated approach allows for better accountability and control, plus end-to-end visibility that shippers cannot get from working with disparate providers.

Evaluate the total package. When hosting procurement events and evaluating transportation partners, the linehaul rate is not the only factor to consider. Shippers must look at the total value package offered and examine the cost of unplanned charges due to service failures. Aligning with service-oriented partners that have strong relationships with receivers and programs to support shipper and receiver of choice initiatives can reduce total transportation costs in the long run. 

3. Accelerate the RFP Process

Use Bid Management Technology. To protect against volatility, shippers often run “mini bids” with shortened contract cycles. This strategy works but may require significant time and effort. Deploying smart bidding technology to accelerate the RFP process can help shippers avoid too much resource drain. Tools that aggregate historical data and provide market intelligence can also enable faster decision making and better purchasing.  

In addition to the above steps, staying informed on trends and best practices will serve shippers well during volatile times. Organizations like Transportation Intermediaries Association (TIA) and Customized Logistics and Delivery Association (CLDA) regularly publish valuable content to connect and lead industry professionals. 

The Capstone Advantage

Supply chains today face significant challenges, but there are options. Outsourcing services to a knowledgeable partner can help you mitigate issues and offer the capacity you need.

Contact us to discuss the possibilities.