95% of Fortune 500 companies work with an external logistics operator. For this reason, the fact of having to work with a transport company is, by far, the most common for those companies that in one way or another need to move materials and merchandise.
And if we want our supply chain to work, we are going to need our relationship with the transport company to work as well. The good news is that if you start from a few simple rules, everything will be easier than you probably think (or than you are used to). However, starting a relationship with a shipping company and not working to polish and fine-tune it from the get-go can leave you with a lot of headaches down the road.
8 aspects that you need to work with your transport company
Establishing the right communication channels is vital for the future of your relationship with the transport company, and it will be even more so the bigger your company is. Who are the contact persons? Which people or departments need to talk to each other? What processes must each department manage (collections, collections, incidents, forecasts, campaign preparation…)? Do we really share all sensitive information with our logistics partner or do we not, either for technological reasons or lack of trust?
It may seem obvious, but in practice, not having these aspects of communication defined leads to inefficiencies and information errors, which can trigger errors in the service.
Although the service portfolio of a transport company can be briefly summarized in a commercial presentation, it is necessary to go into detail about the services before closing an agreement. Issues such as determining possible deviations in delivery times (how much deviation, from what point economic compensation could be established, what exceptions are there to standard delivery times…), the costs of additional services, the types of merchandise that can and cannot be transported, the deadlines necessary for the request for services, the way in which the necessary information will be delivered, etc.
When the client and the transport company move on the same page in all these aspects, things are much easier.
Foresight is a critical concept throughout the entire supply chain. Working together with our transport company can make what used to be chaos and improvisation now become established and predictable processes. Even our transport company can help us in our forecasts, using warehouse metrics, data from previous years, etc.
We have already commented that communication is fundamental in the logistics operator-client relationship, and at this point it will be especially so. Companies sometimes do not provide information to their transport company for different reasons: they are not able to gather and anticipate this information, they do not want to anticipate it for fear of possible information leaks (that the quantities of a product that a company is moving are known , for example), or for other reasons.
This will prevent us from carrying out real forecasting work: how many materials we will move, on what dates we will do it, what our destinations will be, what delivery dates we have for each of these shipments, what means we will need to carry out the entire operation, etc In this way, instead of a forecast that greases all our operations, we will have a conflictive relationship with the transport company.
4.- Win-win approach
Few terms have become more repetitive in the business world than the expression win-win (win-win). However, approaching the relationship with the transport company in this way is a paradigm shift that can give us great benefits. If our deal with the logistics operator responds to the outdated theory that we must tighten the screws to our benefit, we will be missing out on a world of options.
Giving a 180 degree turn means that instead of working against our suppliers, we work alongside them, pushing in the same direction. So instead of trying to make our profits in the relationship come from the piece of the pie that we take from our supplier, what we will achieve is discover all that we can achieve because the transport company understands our needs, can have margin to provide us with value and, ultimately, give us a better service.
5.- Visibility of the supply chain
Achieving real visibility in the supply chain is another section that will greatly help in your relationship with the transport company. The pressure to know at all times where the merchandise is is increasing for all companies and not achieving it is a constant source of possible incidents. The integration of the computer systems of the client and the transport company is vital so that this traceability is not lost. Achieving this will reduce unnecessary calls, increase relationship satisfaction, and make the original customer and end customer more satisfied.
6.- Understanding costs and cost overruns
Few things can cloud a professional relationship more than receiving a bill and not understanding why we have been charged for something. In this regard, both the client and the transport company sometimes do not do their homework correctly, some when it comes to explaining what costs may appear and others when trying to understand them when they are explained.
In transport, many of the services are quite standardized and it can be easy to know their exact cost with a glance at the tariff. However, there are many aspects in which the fine print can enter: additional services (depalletization, deliveries on weekends…), if the same price is charged for an American pallet as for a European one, the calculation of the volumetric weight, the repercussion of gasoline or the variation in its prices, special insurance, etc.
How fragile our merchandise is and what we are going to do to take care of it is a vital issue. But, incredible as it may seem, even in cases where the goods are sensitive, the issue sometimes takes a secondary role during negotiations. And it only takes center stage when we have already reached the operations, so that the problems also do not take long to appear.
The security of a shipment does not depend exclusively on normal operations. That is, how it is transported and the care taken during loading, unloading, delivery, removal, etc. For safety, the preparation of the pallet is very important: shrink-wrapping, placement of the merchandise, non-slip papers or other devices to protect the merchandise (such as edge corners, which also add fixation).
Establishing all these details in advance -and the cost- can save us a lot of trouble tomorrow.
8.- Set objectives and metrics
Imagine that you have been working with your new transport company for a year now. How do you know if they are doing it right or wrong? The answer is simple: through performance indicators. Once again, establishing in advance what you are going to measure -delivery times, losses, breakages…- and what are the objectives to be met will be critical. This way you will have a common and known field in which you can objectively assess if you have achieved what you had proposed.
This objectivity when measuring the results will also benefit your relationship and will allow you to know where the points of improvement are, in addition to not depending on isolated incidents -or last minute incidents, which can fictitiously alter the perception of quality. received as they are the most recent ones-.
Few things will facilitate communication more and make your work with the transport company more efficient than having mutual objectives in the results to be achieved.
If you manage to work on these aspects, the relationship with your transport company will take a radical turn and you will start playing on the same team, instead of facing each other. Your logistics operator must be your best ally. If it is an impediment, it is that something is failing in your relationship.