21st Century Logistics – ‘Uber-Style’ vs. Relationships15 Aug 2016, by Blog, Logistics Outsourcing, Transportation Spend in
With the introduction of countless online shipping websites and ‘Uber-style’ apps, shopping for freight rates is easier than ever for companies of all sizes.
These new technologies clearly provide some benefits. With a fast online search anyone can find both capacity and low rates to get loads covered. But, there are downsides to the convenience. Like anything else, you get what you pay for when buying transportation services. And choosing the cheapest shipping option this way will always come at the expense of establishing a real relationship with a 3PL partner.
Sometimes, the lowest price feels like the obvious choice. After all, keeping freight costs down is a huge priority for every company. While operating quote to quote may provide some short term gains, it will also come with negative long term consequences.
For one, a quality logistics partner you work with consistently can offer a deeper look at data. This will help you determine new ways to optimize shipments for better customer service and also leverage better pricing strategies.
When things go wrong, and they will, having someone personally invested in helping to resolve the issue is invaluable. Most freight portals leave that to the shipper, requiring you to work directly with a carrier you have little relationship or pull with to fix the problem.
Things gets even worse with the claims process. Carriers are obviously incentivized to NOT be helpful settling claims, and Uber-style freight portals let you fight those battles on your own. A relationship with a good 3PL gives you an expert to resolve claims on your behalf. In both these examples it can be your 3PL partner’s volume that forces the carrier to honor their responsibility to fix problems and pay claims.
In the end, the long term value of this approach will not show up by saving you $50 on a single shipment, but by saving $25 on 100 loads. It’s obvious what’s better in the long run for your company.
If you would like a 2nd opinion of your current Logistics Strategy, check out my ROL Assessment™ that will benchmark where you are and offer strategies where you can optimize. Email me to learn more at firstname.lastname@example.org