February 18, 2022 | Insights
How to Evaluate Shipping Carriers
February 18, 2022 | Insights
As your business evolves and market conditions change, it’s important to regularly evaluate whether your suppliers are still a good fit for your needs. You may have shifted away from selling goods in brick-and-mortar retail toward more eCommerce, begun selling your products in new markets, or simply be looking for a way to mitigate risk in the face of supply chain disruptions. These are all valid reasons to consider whether your current shipping carrier is still the right one for your business.
In this article, we’ll cover a few key areas to analyze when you are evaluating fit in a shipping carrier, along with how these points translate to selecting the right provider for logistics in your distribution center yard.
Reliability, Quality, and Cost
Your customers are judging the trustworthiness of your business by how your shipments show up: are they largely on time and complete? Is communication on status proactive and clear? These factors are largely under the control of your carrier, but your customers are likely to hold your business accountable for underperformance.
There’s an old concept called the “unattainable triangle” which posits that goods or services can never be fast, inexpensive, and high quality all at the same time. One of these must always be sacrificed: you can have something on time with high quality, but it won’t be cheap; you can have it fast and cheap, but it won’t be any good…you get the picture.
Shipping carriers follow the same rule. It can be tempting to choose a provider that offers the lowest price, but you must consider what you may be sacrificing in order to receive the lowest cost. Shipments that are consistently late, are poorly documented, or arrived damaged will only wind up costing your business more in the long run in replacements, chargebacks, and lost customers.
Asset-Based vs. Non-Asset-Based
Asset-based carriers own the equipment they use to transport your freight, while non-asset-based carriers do not. Non-asset-based carriers accomplish the transportation of your goods by subcontracting with asset-based carriers and by leasing equipment.
There are benefits and drawbacks to each style of carrier, and which is right for you depends on your individual situation. One of the benefits of choosing an asset-based carrier is that your partner is directly responsible for ensuring its fleet is well-maintained and its drivers are properly trained and licensed. There is no intermediary when it comes to this type of relationship, which can make it simpler for you as long as your asset-based carrier provides all the services you need. You may also realize some cost efficiencies since there are no equipment leasing fees that must be marked up and passed on to you, the customer.
A non-asset-based carrier, however, may be better suited for you. These carriers typically have a wider network of providers with whom they have negotiated favorable rates. They can also choose the carrier that best fits your needs on your behalf, which can reduce your workload if you have an operation with complex needs. It’s important to note that non-asset-based carriers have less control than asset-based carriers when it comes to how your shipments are executed, so solving problems can be more difficult.
Safety and Sustainability
The way your goods travel from point A to point B is a reflection of your brand. If you’re like any of the customers we work with, then both safety and environmentally friendly practices are likely important to you. Knowingly working with a carrier that engages in undesirable practices to get goods to a destination on time reinforces the behavior and can reflect poorly on your business. Choosing a partner who values their team members (and other drivers on the road) as much as you do will demonstrate your high standards in all your dealings.
Sustainability is becoming a higher priority to many companies as a result of increased awareness of commerce’s impact on the environment. Corporations are paying more attention to these factors because of ESG reporting requirements. And many business leaders are simply examining their practices out of a sense of ethics and responsibility to future generations. Choosing a logistics carrier that prioritizes factors such as fuel efficiency and reducing carbon footprint is a smart play for any organization that counts going green as one of its goals.
Looking Inside the Yard
These criteria can also be used to evaluate the success of your yard operation, too. Here’s how they translate to looking critically at what’s happening between the gatehouse and the warehouse dock:
- Are cost-saving measures in executing moves in the yard actually costing you time and headaches?
- Can you count on your yard drivers to show up on time? Do you have backups on call if someone is sick or doesn’t show?
- Does your provider own the equipment being used? How well-maintained is it? If a tractor breaks down, how does that affect your productivity?
- Are your yard drivers following documented safety protocols? How well-trained are they?
If your yard operation has opportunities for improvement, we can help you determine what to do next. During a no-obligation virtual yard audit, our experts can guide you on ways to improve your efficiency and make every move count.
Great Logistics Are Not One-Size-Fits-All
What’s right for one business may not be right for another when it comes to logistics. When evaluating your partners, be sure to consider their services and skill sets against your organization’s priorities. We hope you found this short guide helpful in choosing the right carrier for your business. Follow NSSL on LinkedIn for more supply chain thought leadership articles!