The transportation and logistics industry is built on a bedrock of partnerships. Perhaps more than many sectors, thousands of companies rely on a myriad of symbiotic partnerships with logistics services providers, which include freight forwarders, 3PLs, 4PLs, carriers, warehousing companies and more.
Some of you may have supplier partnerships you’ve kept for decades. After all, why change something that’s operating smoothly? And a few of you may have just started working with a new partner after performing what you thought was the best approach for vetting partner choices.
Over the years, I’ve worked with hundreds of customers in setting up supplier agreements. How do you go about choosing a logistics services partner? What factors do you evaluate? And what weight do you place on each factor? Well, there can be hundreds of factors that you can use to assess the strength and value of your supply chain partners.
So, what are the key elements of a successful supplier partnership? I’d argue that there are three key factors you should use to evaluate the strength and potency of an efficacious and enduring logistics services partnership.
The 3 factors:
For any partnership to thrive, there must be unequivocal trust between the two parties. After meeting and getting to know the team that supports your company day-to-day, do you trust them to always act in your best interest? Are they committed to helping you achieve your business goals? Will they make the best decisions for your freight? For instance, if a load is too high to go on a standard flatbed, will they suggest a step deck or low boy instead? Do you trust the team to make the right call for your company? Can you trust the partner to complete the correct permits for interstate transportation?
Furthermore, can you expect your logistics services partner to give you the straight scoop if your shipment is going to arrive late? You shouldn’t be led to believe that something’s on time when it’s not. If a carrier gives back a shipment, your logistics services provider should tell you that the shipment’s been given back and find a new truck for it.
Communication is inextricably linked to trust. That’s because when there’s high trust in a partnership, communication flows undeterred both ways. The goal of communication should always be complete transparency. And in the spirit of open communication with your logistics services partner, expect disagreements to be handled with professionalism and sound conflict-resolution practices. Through conflict resolution, the two partners can identify the problems, work through them together, and agree to a win-win solution.
Good communication also means making sure your supplier keeps you aware of all the tools that may be available to you. On the MyLPS TMS, for instance, we have density calculators and resources for filing shipping claims, as well as other reporting tools to deliver shippers business insights to your freight.
As a shipper, I encourage you to partner with companies that are evolving continuously—adapting new technologies and implementing new processes. Work with logistics services partners that have a vibrant continuous improvement culture. Does your partner have excellent receiving and shipping procedures? Are they making the necessary investments in technologies and processes that can deliver hard savings to your supply chain and logistics budgets?
Also, do you see your partner at industry conferences and trade shows presenting and publishing thought leadership pieces? Do they understand your business and take the time to listen to your needs?
Is the partner coming to you with more efficient methods for shipping your freight? For example, are you using all the space in the trailer? Could you wait two days and ship a full truckload instead of shipping three LTL loads?
We often have our Transportation Management System (TMS) development team collaborate with our client’s team to understand their business process so, together, they can create more efficient workflows by integrating databases and systems, which saves both time and money for shippers.
Keep it Simple
Next time you’re evaluating your logistics services partner, don’t get bogged down with a complicated matrix or Magic Quadrant, keep it simple and make your decision based on three factors: Trust, communication, and innovation.