Cost is not the only determinant when it comes to choosing a logistics partner. Businesses who consider these 6 key factors will be rewarded with a relationship that truly delivers.
Bid analysis can be deceptively simple. It often appears to make the most sense to choose the carrier that offers the lowest cost. However, the lowest cost may not be the best value. There are myriad other factors at play when it comes to finding the right logistics partner — one who will step in and fill what is arguably the most important partner role in your operations.
Thanks to the surge of online shopping and e-commerce businesses, logistics is a growing industry, which means there are more logistics providers to choose from than ever. This is both an advantage to business owners and a dilemma. With so many providers promising cost efficiency, incredible customer service, and supply chain expertise, what actually indicates the best choice for your business?
The right approach is to treat the bid analysis process like a series of job interviews. This means asking questions that will reveal which logistics providers can live up to their promises, and which are merely skilled at marketing themselves.
To separate the exceptional from the average, businesses should ask the following questions during bid analysis:
What experience do you have within my industry?
How are you using technology to innovate?
Who is my point of contact?
Do you have a plan for supply chain risks?
How can you scale to meet the needs of my operation?
1. What experience do you have in my industry?
The right logistics provider for your business most likely has experience in your industry. A carrier with this kind of familiarity will understand the shipping needs and shopping patterns of your customers as well as the shipping methods needed to facilitate your operation. When asking this question, make sure the vendor names specific businesses and ask for testimonials from those clients.
2. How are you using technology to innovate?
Logistics is an increasingly automated process that thrives when technology has the capacity to innovate while integrating. Ask potential logistics providers how their technology will integrate with your systems, and what solutions they have or will implement to innovate.
Leading technological innovations in the logistics process include Bluetooth cold cargo trackers, dash cams, real-time updates on shipment status, and other new solutions. Technology has the power to increase safety, drive efficiency, and save money. The best logistics providers stay current with industry trends and are always looking to make improvements.
3. Who is my point of contact?
This seems like a straightforward question, but the answer will be telling. The real question here is “What is your customer service like?” A great logistics provider will have a quick answer and also be able to elaborate on how you can reach that point of contact, how quickly you can expect to hear back, and what the plan is for communicating, problem-solving, and answering questions along the way.
4. Do you have a plan for mitigating supply chain risks?
No logistics provider can predict global pandemics, hurricanes, fires, and other supply chain risks. These things happen and there must be a plan in place for diverting warehousing, preventing shipment delays, staffing, and maintaining safety standards. Do they have these plans in place?
5. How will you scale to meet the needs of my operation?
The needs of your business may change. The right logistics provider can step up to change with you. Ask prospective partners about scalability. How quickly can they start handling your business? Who will be the main points of contact to address any shipment issues? What additional value-added services does your company provide to ensure that my goods are picked-up, handled, and delivered on-time? Look for specifics that indicate a detailed, flexible plan is in place to meet the future needs of your business, whatever those needs might be.
Need help with bid analysis? Resource Logistics Group is a trusted partner in helping businesses with back-office solutions while allowing you to handle day-to-day operations. This includes transportation bid management through our proprietary bid software, and it also extends to every step of the supply chain process. Whether you are concerned about accessorial charges, contract language, base pricing, or some other element of logistics procurement, Resource Logistics Group can help. Contact us to start the journey today.