3 Tasks That Go Into Effective Shipping Carrier Management (2.12.24)

Managing relationships with your shipping carriers goes beyond negotiating contracts. You must be able to analyze performance, hold them accountable, and handle all claims that arise, too.

Shipping goods worldwide or around the country comes with significant logistical challenges, not the least of which is finding a carrier that can meet your business' unique needs. 

You'll often start by determining the type of shipping carrier you require. Deliveries within the United States usually rely on LTL and FTL shipping options, while overseas shipments might require boats or planes. 

The next step is finding carriers that can meet your deadlines at prices that fall in line with your company's budget. When doing so, you should put out a request for quote to see what kind of terms shipping vendors are offering. 

However, the job doesn't end after your agreement comes together. Effective shipping carrier management is an ongoing process. Part of this process involves holding your vendors accountable when they don't meet your desired metrics and re-negotiating contracts as more information becomes available.

Here's a look at three aspects that go into effective shipping carrier management.

1. Setting key performance indicators

First and foremost, you'll want to ensure your shipping carrier is meeting your organizational needs. You can accomplish this by collecting data on your vendors' performance through a series of pre-determined KPIs, or key performance indicators. 

Examples of KPIs you might gauge include the accuracy of your carriers' invoices, how often they're late with pickups and deliveries, and the quality of the tracking data they provide along the way. 

When your carrier falls short on any of these KPIs, you might be due a refund, or it might be time to reevaluate your relationship with that shipping company. 

On the other hand, using these key performance indicators can also help you build strong relationships with your carriers. When you let them know what you expect of them, and they meet these expectations, it can create a solid working bond lasting for years.

Come up with these KPIs before all else, as they give your carriers a clear sense of what you expect of them. 

2. Analyzing carrier contracts

Before signing any agreement, scrutinize the contract language. There are often clauses within these documents that could lead to your organization paying more than anticipated. 

The same goes for any pre-existing contracts you're looking to re-negotiate. While this might sound straightforward, each carrier contract contains a lot of information, and you might not be aware of all of it.

There's the price, for starters, as both parties will agree on the expenses paid for service rendered. However, there are always fees and surcharges on top of the standard rates, including documentation and pallet costs. You could also end up paying service fees if your cargo isn't ready when the truck arrives to pick it up. 

The good news is that you can negotiate these fees as part of a more comprehensive agreement. If your carrier isn't prepared to make concessions on these charges, it's sometimes advantageous to shop around. The vendor offering the lowest upfront rates doesn't always end up costing you the least or providing the best service. 

Other items on your carrier contract include payment terms, service expectations, term length, agreement termination rules, automation options, and confidentiality agreements. A significant portion of carrier management involves ensuring all of these clauses meet your organizational needs and negotiating anything that doesn't fit.

3. Claims management

A final element that goes into carrier management is handling and resolving claims that arise. This job is more important than many companies realize because you could be due a refund on late or mishandled freight. You'll also want to recoup expenses if a customer doesn't receive an item.

Having protocols in place for lost or damaged merchandise will help your organization ensure it receives refunds when necessary. It can also provide a quick resolution for your customers’ complaints. 

Keep in mind that the claim resolution process can be long and tedious if you aren't prepared to handle it. Efficient logistics departments often retain a dedicated team to deal with claims management, leaving their managers free to work on more pressing issues.

If you don't have a claims management strategy, now's the time to implement one.

Help is available

Carrier management is a lot of work, particularly if you're also in charge of other parts of your organization's logistics operations. Shipping contracts will be of the utmost importance in 2021 because eCommerce isn't slowing down anytime soon, and there will be high consumer demand for the delivery of goods. 

Resource Logistics Group can assist as you put 2021 carrier contracts in place and manage them going forward. Our team leaves you in control of your logistics operations while providing support on jobs like claims management, RFQs, and contract negotiation. The result: You save money and receive the best possible service. Contact us to learn more or for your free benchmarking analysis.