Freight fulfilment really is ‘make or break’ for businesses. 88% of consumers say online reviews play a role in discovering new businesses. And ‘late delivery’ is the top reason for customers leaving one-star reviews.
Notably, this negative sentiment around delivery exists regardless of any potentially mitigating supply chain issues. In other words, customers don’t care how something gets from A to B. They just want purchases to be affordable and reliable. Joining the dots is a problem for the sender to solve, regardless of the obstacles.
Effective carrier management allows you to streamline costs and keep your offering as affordable as possible for customers. But with ongoing logistics challenges and a lack of consistency across carrier processes, how can you truly optimise carrier management? The key is to control the controllable and eliminate the guesswork to stack the deck in your favour.
Consequences of Not Optimising Carrier Management:
- Leaving money on the table
- Higher risk of goods getting damaged
- Customer drop-off & loss of repeat business
- Not getting enough freight out of your warehouse
- Leaving too much stock on the floor
- Higher storage costs and/or wastage
- More employees required to manage the excess
Due to Australia’s geography, increasing consumer demands, and the variety of goods that businesses typically stock, it’s increasingly common for retailers to use multiple transport carriers. As a result, carrier management has become more important than ever for growing businesses.
Here are 10 simple tips to improve how your business manages freight carriers.
CONTENTS
1. Understand the Importance of Carrier Management
2. Assess Your Transportation Needs
4. Negotiate Favourable Contracts
5. Establish Performance Metrics
6. Build Strong Relationships with Carriers
7. Utilise Technology for Efficiency
9. Monitor Transportation Spend
10. Stay Updated with Industry Changes
1. Understand the Importance of Carrier Management
Freight carriers and the businesses whose goods they carry have a symbiotic relationship. They’re part of the same ecosystem and rely on one another.
As businesses look to scale, order volume is the first area that can quickly get out of hand. With more customers making purchases, it’s increasingly difficult to process orders manually without delivery times and costs spiralling out of control.
Understanding the importance of carrier management systems — with proactive planning and tools in place to handle fluctuating order volumes — is crucial to keep your business running smoothly.
2. Assess Your Transportation Needs
The nature of your products has a strong bearing on your transportation needs. Are they small goods that can travel as standard freight? Are they fragile, heavy, or hazardous items that require specialised packaging or care? Are they oversized or large volumes that won’t fit in a van? Does the recipient have a loading dock, or does the vehicle require a tailgate for lowering large items to ground level, for example?
Establish what criteria would be prioritised for a typical order — such as delivery times, cost, and carrier mix — to help you shortlist the top contenders.
3. Select the Right Carriers
Once you have a clear picture of your transportation needs, you can filter carriers accordingly — Note: Your freight management software should automate this process. Choose carriers based on who provides the most suitable transport options for your goods and customers.
It’s not a simple case of one-size-fits-all. There’s no such thing as an objectively ‘best’ freight carrier. Consider factors including price, service, speed, flexibility, and reliability. Prioritise the metrics that matter most to your business and, especially, your customers. Be mindful that some carriers may be better suited to certain types of shipments.
While carriers perform very similar functions to one another, their processes often differ — namely, the paperwork they require, such as item labels that are attached to packaging. These labels are necessary for compliance as well as tracking. If you’re picking and choosing multiple carriers for different shipments, you need a means by which to standardise how you print out compliant labels for any carrier. A freight management software platform will allow you to do this automatically.
4. Negotiate Favourable Contracts
When negotiating freight contracts, there’s two things you want: information and options. The more information you have access to, the better equipped you are to negotiate. And if you’re speaking to multiple carriers, the more leverage you have to negotiate.
To negotiate favourable rates, you need to understand your operating costs, market rates, and your business’ specific freight needs. Then it’s a matter of doing due diligence and sourcing quotes from multiple carriers to compare and seeing if there’s any wiggle room to haggle. Of course, if you have established relationships with certain carriers, you may not want to risk getting them offside by ‘playing the field’. But, at the end of the day, carriers are trying to win your business, so it only makes sense to keep an eye out for better offers.
MachShip gives you a custom setup to transact directly with your existing carrier partners using your negotiated rates.
5. Establish Performance Metrics
While you may have preferred carriers that you’re comfortable using, it’s important not to get too comfortable. While trust is a big part of professional relationships, that trust must be underpinned by reliable performance, not just goodwill and familiarity.
Keep an eye on fulfilment success rates, delivery times, freight costs, and customer satisfaction levels. As a business, your carriers should be incentivised to perform well. If they know you have other carrier options at the click of a button, they’ll be all the more focused on maintaining strong results.
Start by running the numbers on your current freight spend and fulfilment metrics to establish benchmarks, set targets for the months ahead, and choose your carriers accordingly.
6. Build Strong Relationships with Carriers
Relationships are important in any industry. With freight carriers, trust is especially important as it’s not a process you can micro-manage in the moment. Once a consignment is handed over to a carrier, the variables from that point are out of your hands until it reaches the customer.
Carriers you can rely on to deliver on time and communicate effectively take a lot of pressure off businesses. By maintaining strong relationships with high-performing carriers, freight fulfilment becomes a well-oiled machine. There’s nothing better than having drivers who know the drill, know where everything is, and understand the level of communication you need. Strong carrier relationships can remove a lot of the stress from the freight management process.
See MachShip’s integrated carriers
7. Utilise Technology for Efficiency
A freight management platform is vital to stay on top of order fulfilment, especially as your business grows. Even for newer businesses with relatively low order volume, it makes sense to get a scalable system in place so you can meet rising demand seamlessly.
Having a user-friendly digital platform to filter carrier selection — while automating key freight processes including label printing, consignment, and invoicing — allows you to streamline how you get products in the hands of your customers. At the same time, you maintain oversight over your entire freight operations to keep budgets in check.
An efficient freight management platform helps your business grow without the risk of losing momentum from disgruntled customers. MachShip users report saving an average of 10 hours fielding customer tracking calls per week.
How to integrate shipping and tracking APIs effortlessly
8. Monitor Performance
It’s one thing to establish performance metrics and set targets. The other part of that equation is to monitor carrier performance and optimise your selections on an ongoing basis. This includes reviewing rates regularly (which can be subject to change), as well as fulfilment rates and delivery times.
It’s impossible to monitor these metrics accurately using manual processes. So it’s essential to have a platform that gives you oversight of all key freight data in real time.
This is extremely beneficial when shopping around for potential new carriers. With MachShip, you can run reports at any time to assess existing carriers and compare them to others you might be considering. New carrier rates can be easily uploaded into the system to run modelling against any of your existing providers. This allows you to see exactly what you spent versus what you could have spent for the same shipments across any given month.
Not only does this visibility inform your freight strategy in terms of what carriers you choose going forward, but it also gives you tangible data to potentially negotiate better rates from the carriers that you’re already comfortable working with.
9. Monitor Transportation Spend
Good value can be just as important as good performance when it comes to freight carriers. Inefficient costs are either going to eat into your margins or be passed on to the customer, which naturally makes your product less competitive.
Being able to monitor transportation spend and track changes over time allows you to quickly spot inefficiencies and adjust accordingly. If your preferred carrier decides to suddenly bump up their prices, a freight management platform enables you to instantly find another carrier with comparable performance at a more competitive rate.
10. Stay Updated with Industry Changes
When the goalposts move, businesses must adapt accordingly. New challenges arise, new competitors emerge, and new tools and technologies become available. Keep up with industry news so your business is ready to respond to any changes as they happen.
Running a business isn’t an action, it’s an ongoing process whether you’re looking to grow your customer base or simply maintain your current level. When choosing a freight management platform, find one that’s customisable and able to grow along with your business.