By Paul Yaussy, Professional Services Consultant
This article first appeared in the July-August 2021 edition of PARCEL Magazine
After nearly two decades in a logistics management role at a prominent retailer where building relationships was a major key to my success, I have changed roles. I always knew how important a great relationship with my carriers was, but in my short time in my new role it has become even more evident. Now, more than ever, having a great relationship with your carriers is critical to the success of your organization.
In my new consulting role at Shipware, the preeminent leader in parcel freight cost reduction and auditing services, I am asked to help clients establish strategies and tactical pricing options to use in negotiations with parcel carriers. It is a partnership built on trust and credibility, which is exactly the type of relationship all shippers should have with their carriers. My first boss loved to say, “this is a partnership, and we like to put the ‘partner’ before the ‘ship.’”
It all starts with the carrier rep. In more meetings than I would like to admit, I’ve heard comments like the following from clients regarding their rep:
- “I have a hard time getting him to call me back.”
- “My rep doesn’t seem engaged.”
- “I haven’t talked to him/her in a few months.”
- “I have a great relationship with Carrier A rep but not the rep for Carrier B.”
When I hear comments like these, I think to myself, I wonder what the shipper has done to foster the relationship with the reps? Believe me, it can be difficult to build a relationship with a rep you simply do not like, or a rep for a carrier you do not use. But it is critical to your success and should be top of mind!
A Real-Life Example
Let me give you an example. Several years ago, the organization I was with did an RFP and ultimately changed carriers, going from the incumbent, “Carrier A”, to “Carrier B”. Over the course of the following three years, my “Carrier A” rep and I made a point of staying in contact, even scheduling quarterly business reviews when there was no business to review. Often, we would give each other updates on our respective businesses, talk about sports, share a family story or two, and perhaps get some lunch.
Neither one of us really had the time for that.
I had a department to run; he had a book of actual business to attend to. Sometimes, I would go into the meeting thinking this is such a waste of time. However, the continued fostering of the relationship eventually paid off, when after about three years of not doing business together, we both had a mutual need.
“Carrier A” wanted more volume to help fill the network prior to the peak. I wanted to produce a per package savings going into the upcoming peak season which was forecasted to be our biggest ever. I had an imminent need to reduce our shipping costs to hit budget plans as our forecast was going through the roof.
Simply by keeping an open line of communication, which took effort on both sides, we were able to have conversations that led to a partnership that benefited both of us. We engaged in a very quick negotiation – less than a week – that produced very healthy savings for my company and delivered the volume that “Carrier A” wanted to help fill the network.
As a result, we moved the entirety of the parcel business over to ”Carrier A”. We were able to transition from one carrier to another in less than a month – right before peak season – in part due to the relationship that both sides made a concentrated effort to maintain.
Your carrier representative is your internal advocate within these enormous organizations. While they typically are not authorized to make high dollar pricing decisions or out-of-the-norm operational considerations, the success of those types of inquiries are borne from the requests and support of your carrier rep. So, ask yourself, what are you doing to ensure you have the best possible relationship you can have with ALL of your carriers? Are you doing everything you can do to be a “Shipper of Choice” with your carriers? When capacity gets tight, will they be there for you?
Don’t Hold Back
Help your rep help you! As you continue to foster relationships with your carriers, it is important that you are doing everything you can do to help your rep understand your needs. Make sure they understand what you need to be successful in your role. When you talk to your carriers, tell them what you need from them using logic and reasoning and make sure they understand. Usually, when reps have a clear understanding of your business and what you need to be successful, they will go to bat for you. If your carrier, and specifically your rep, truly value your business, they view your success as their success and want to share in your wins.
Both the big and the little things count:
- Let’s start with attitude. Are you the type of customer that likes to receive, but never gives? Would your rep say you act like you’re doing them a favor, or that you truly act like a good partner, expressing genuine interest in your reps as people and fellow industry professionals? Do you use threats and scare tactics, and threaten to switch carriers with every increase and service failure, are you reasonable, thoughtful, tough but fair? When you go to lunch, do you ever pick up the tab? Also, are you a gatekeeper, insisting that your Account Executive only deals with you, or do you promote their introduction and influence throughout the organization, especially the C-suite? Remember, sales professionals are tasked with developing relationships and value throughout the organization. It’s only to your benefit to help them do their jobs!
- Do you provide accurate forecasts to your carriers? Now more than ever, providing accurate and timely forecasts to the carriers is essential to the success of the partnership. Carriers rely on this data to build their plans related to labor, equipment, terminals etc. Over the most recent couple of years, carriers are holding shippers to their forecasts and not accepting packages that have exceeded the forecast. At Shipware, some of our clients are telling us as early as June that carriers are informing them that they are not accepting new volume NOW!
- Do you afford the reps the time to do business reviews? Yes, this can be a painful part of the process for busy logistics managers but taking the time to review the business with your rep is critical. You both can proactively share information and have conversations that could potentially decrease the amount of heartburn you will have as peak approaches. Or, as my example above illustrates, unpredictable opportunities might arise out of conversations had during business reviews.
- Do you have easy access in to and out of your facilities? Carriers run on very tight schedules. Easy access in and out of your facilities is viewed favorably by carriers. Are your pickups and deliveries difficult to make, or are they easy? Can the carrier get in and out of your facility quickly, or do they face obstacles every time they arrive? Does the driver have to ring a bell and then wait for you to let him in, and if so, how long is the wait? Are the dock doors or access doors free from obstructions, or does the driver have to perform gymnastics just to get the truck near your doors? Are you doing everything you can do to make the pickup and delivery process easy?
- What about psychic awards? Do you express sincere appreciation when your rep does something exceptional? Do you compliment the rep in front of their boss? Consider implementing vendor awards or offering to serve as a customer reference or customer tour site. Sincere recognition and positive reinforcement promote the behaviors you’d like!
- Do you have an excellent front-line relationship with your drivers? This should probably be at the top of the list! The relationship you have with the driver is often the most important relationship you can have with your carriers. The most successful shippers have great relationships with their drivers. They do things like answering their door quickly, engaging in conversations both professionally and personally to foster a rapport, providing a cold water or Gatorade on hot days, or coffee and snacks once or twice a week.
Both sides of the shipper/carrier relationship must proactively work to continue building the relationship. Simply put, both sides must do what they say they are going to do:
- Both sides should act in fair and professional ways.
- Carriers must bill correctly, and in turn, shippers must pay timely.
- Carriers and shippers must share relevant and accurate information.
- Timely follow up is a requirement!
The COVID-19 pandemic placed an immense strain on the transportation network. We have all been living through it for more than a year, so there is no need to rehash it. As it relates to shipper and carrier relationships, now more than ever it is critical to have a positive, on-going relationship with all your carriers.
The pandemic has made meeting harder…. or has it? I would argue that having to meet virtually with carriers over the last year has actually been easier, not harder. Both the carrier rep and the shipper do not have to plan for travel to meet, meaning there are more options to make it convenient for both. Perhaps, you can have shorter but more frequent meetings, and information sharing is as simple as sharing your screen with each other. Yes, in-person is great, but there is no reason to allow virtual meetings to hamper your ability to partner with your carriers.
Ultimately, both sides of the relationship want the same thing… a successful, long-lasting connection built on trust and credibility. As a shipper, if you find yourself questioning whether you are getting everything you want out of the partnership with your carriers, I urge you to look inward to see if you are doing everything you can to nurture or promote the relationship.
Paul Yaussy is a Professional Services Consultant for Shipware, where he consults and advises clients through transportation cost reduction strategies. Paul joined Shipware in April of 2021 after more than two decades in logistics management roles, most recently at JOANN Stores, where he distinguished himself as a transportation cost-reduction specialist and was responsible for leading the team that routed over $80M in parcel, truckload, intermodal, and LTL freight.