Transportation and Logistics Managers: Stop Being Cheap!
Yes, you read the title correctly, and you may be scoffing at the idea of someone else telling you how to do your job.
Allow me to explain why being cheap is not in your company’s best interest long-term.
Maximize Supply Chain Efficiency
Maximizing efficiency throughout your Supply Chain is all about reducing waste, proper allocation of resources, and improving overall product or service quality.
The last link of most supply chains is transporting finished goods from manufacturer to the customer in a timely fashion. Many times we’ve seen Transportation and Logistics Managers look to the cheapest option in order to fulfill their freight transportation needs.
This is where things go wrong. While keeping costs low is important for any business, it should not be the deciding factor in your brokerage decision. Typically, the cheapest broker will provide the lowest quality of service and lacks the necessary experience to properly handle your unique transportation needs.
Take it from a brokerage perspective: The broker that is always offering the lowest rate is typically the new, inexperienced broker who is just trying to get in with any customer who will give them freight. This broker is trying to establish a book of business by routinely under-cutting the lowest rate that is provided in an effort to gain your trust as “The guy who saves you money.”
Do not fall for this trap. Being cheap in your brokerage choices can end up costing you much more in the long run than the $50 you just saved on that load.
Establish Relationships in All Areas of Your Supply Chain
While I cannot knock the hustle of a new broker trying to establish their book of business, shippers need to take caution if they routinely find themselves choosing the cheapest option on a load by load basis simply to save a few bucks here and there.
Establishing a professional relationship with an experienced Freight Broker can mean a world of difference when it comes to the quality of service provided. If on-time delivery, 24/7 updates, and a wealth of knowledge navigating hectic situations are important to your companies’ supply chain optimization, well, then you would be smart to consider working with an LDI Freight Broker.
Allow yourself to consider this common occurrence in the world of logistics:
The carrier that the “cheap broker” booked suddenly falls off your load. The broker informs you that the carrier has cancelled but he/she will try to source another truck as soon as possible to remedy the situation. As it turns out, the “cheap broker” was unable to source another truck at the rate that he/she provided.
Now what? You are stuck with no truck, a useless broker, and an upset customer who was expecting their freight to be delivered on time. This is exactly the situation that Supply Chain Professionals want to avoid!
If put in this exact situation, an LDI Broker would have most likely already recovered a new truck without sacrificing any down-time. Equipped with more flexibility in their rate, the LDI Broker would utilize our extensive carrier network to find a new truck likely before they even have time to tell you that the first truck fell off. The broker would of course inform you of the situation, but hearing that a carrier fell-off is much more bearable when another carrier is already in place to recover your freight.
Our brokers and support staff are committed to providing quality service here at LDI. With a carrier network surpassing 100,000 we’ll always have the capacity necessary to handle your needs and quickly fix any issues that arise.
Any proficient transportation manager would want to avoid this situation at all costs. This is why I will repeat: Do not be cheap! It will more than likely come back to bite your company down the road in the form of missed deadlines, factory shutdowns, spoiled product, or worse: losing a customer.
Establishing a relationship on the basis of trust, transparency and communication is the standard that you can expect when working with Logistic Dynamics Inc. Each shipment has its unique traits that need to be addressed by an experienced broker in order to achieve success.
Attention to Detail is Priceless
Variability must also be considered on each and every load that you ship. Dock hours, Insurance Requirements, Carrier Rates, Carrier Capacity, and Load Accessorials will all vary based on the type of shipment and the time of year that you are shipping. Attention to detail is vital to any successful transportation arrangement.
I think all Transportation Managers would agree that it is important to keep the receiver of your freight happy time after time. One mishandled or late shipment will allow doubt to creep into your customer/receivers’ mind about your ability to consistently supply product on time and hassle-free. They may have already started to look for a new supplier to eventually replace your company altogether due to the perceived inability to meet their standards. Now was the few dollars that was saved by choosing the cheap broker worth it? Absolutely not!
Ask yourself what is the most valuable aspect of your current business? If you answered “My Customers” then we certainly agree with you. Why risk betraying their trust by using an inexperienced and under-equipped freight broker? Your customers’ satisfaction is far too important to jeopardize by cutting costs in transportation decisions.
Don’t Let Cost be the Deciding Factor
It is seen far too often that a shipper (like yourself) has a rate in mind that they want to pay for a particular shipment. They refuse to pay a dollar more than that rate, even if it means the freight will sit for days before a broker offers a low-enough rate.
There is nothing positive that can come from this practice.
Sure, that shipper may boost their self-worth by proving to the world that they can move freight cheaply and refuse to budge on their rates… But at what cost? The freight may arrive several days behind schedule.
This month’s blog post comes from LDI’s Alex Kuczka. Alex has his bachelor’s degree in Supply Chain Management and his responsibilities at LDI include agent business development and carrier sales support.
If they were flexible in considering brokerage options, they could have moved the freight on time with excellent communication and customer service. That alone should be more valuable in terms of customer satisfaction than saving a few bucks on the truck ever would be. The receiver is not concerned with how much you paid for the truck; they just want their freight delivered on time as promised.
Partnering with an experienced and knowledgeable LDI Freight Broker may be in your companies’ best interest. We may not always be your cheapest option, but you can rest peacefully knowing that your broker is a veteran of the industry and can handle any situation, small or large, because odds are they have been there before.
Contact us today to be connected with an expert Freight Broker who can fulfill all of your supply chain transportation needs!