DC Velocity - Tip Sheet 2012

of commercial drivers are expected to leave the business over the next several years, pushed out by advancing age, tough new government safety rules, and a general weariness of the road and the short shrift their skills often receive. Diesel fuel prices reached a national average of $4.15 a gallon on April 9 and could go higher. Asset inflation is hitting everything from trucks to tires, to motor oil to labor. And ever-increasing government regulations have added to those operating costs and subtracted efficiencies from the supply chain.

With capacity contracting and costs rising, carriers can no longer afford to accept and move all freight that comes their way. And shippers no longer have the luxury of contributing nothing more to the relationship than the goods they tender.

“Ten to 15 years ago, the definition of a good
shipper was ‘one that had a lot of freight,’” said
Dan Van Alstine, senior vice president and gen-
eral manager, dedicated services for truckload
and logistics giant Schneider National Inc.
“Today’s definition is much different.”
Refrigerated truckload carrier Marten Transport
Ltd. believes it can define a good shipper, at least
on paper. Marten executives keep a checklist—in
the form of a PowerPoint presentation—that out-
lines how a “perfect shipper” should behave under
more than 25 different scenarios.

Yet finding “shipper wonderful” seems consigned to the realm of fantasy at Marten, at least for now. For example, about 30 percent of its refrigerated freight still doesn’t get loaded or unloaded within a generally acceptable two-hour time window, according to Tim Kohl, president of the Mondovi, Wis.-based carrier. This is no small problem for Marten, considering its drivers have only 11 hours in a day in which to haul and that they operate specialized tractor-trailers that can run $200,000 per unit and are costly assets if they’re not moving.

The pressure on both sides is unprecedented. Yet the burden seems to fall more on the shippers. After all, it’s their freight—and their business—at stake. Many shippers have never needed to think about being “sticky” with their carriers. The time to start thinking about it, experts said, is now. Herewith are four steps to being a “good” shipper:

1Trust, communicate, and participate. These are time-worn maxims. But they are worth repeating, especially since all carrier and third-party logistics (3PL) executives interviewed for this story did so.

“Carriers don’t want to be treated like vendors,”
said Ben Cubitt, who sits in the middle of the fray
as senior vice president of consulting and engi-
neering for Frisco, Texas-based 3PL Transplace.
“They want you to be fair. They want you to
engage in fact-based discussions. And they want to
be recognized for doing a good job for you.”
This recognition, Cubitt said, should come in
the form of consolidating more business with a
top-performing carrier, especially if the carrier
has invested in building a broad product and
service portfolio that reduces a shipper’s costs
and improves convenience.

Shippers should also take pains to roll out the freight within four to six weeks of accepting a carrier’s bid, Cubitt added. Too many shippers wait longer than that, a habit that tests a carrier’s patience and won’t win that shipper many friends.

In a world where shippers no longer dictate the terms of engagement, carriers will insist that their customers take the time to understand their business and proactively communicate any changes in their shipping patterns that may affect capacity allocations, carrier executives said.