Next Tuesday, at 10:30am EST, I will be hosting a very important session at the CSCMP Edge 2021 annual conference about critical pricing issues that shippers need to address in their negotiations with their LTL carriers.
I bring this up because our Two Minute Warning from last week that featured a new interview we held with Roadrunner EVP David Ross really “lit up the proverbial scoreboard.” With over a couple thousand people opening it up, we’ve gotten some great questions about David’s insights and what this means for companies who are looking to build a comprehensive LTL sourcing strategy.
At next week’s CSCMP Session we have some great resources that will be answering many of these questions, but for those of you who may not be attending this outstanding conference, there are three critically important things that your company must “nail” if you are committed to conducting a great LTL sourcing event that yields outstanding results.
1. Know your book of business and freight requirements better than you do today.
As David noted in his interview, the two most important variables for an LTL carrier are space and time. In short, how much space will it take to move your freight and how much time will be spent moving that freight? Based on conversations with several C-Level executives from LTL carriers, shippers who want the best possible rates will be able to provide data to the carriers that answers these two questions. In years past, when the LTL carriers were focused on capturing as much market share as possible, shippers could get away with providing data to carriers that were based on estimates, approximations, and truthfully, guesses about future expectations. Today, the carriers want accurate data that will help them understand how much it will actually cost to serve your business
2. Understand a carrier’s cost structure.
Speaking of costs, one interesting observation we have gleaned from our dialogue with LTL carriers is that most shippers have no idea how much it costs a carrier to service their business. According to these carriers, very few shippers even bother to ask for information that addresses this issue. But as David noted in his interview and as we will highlight in our session next week, most LTL carriers see transparency as an asset and are willing to share information – if asked! That is why we strongly recommend that shippers utilize our carrier yield test worksheet - or something like it in working with their carriers to understand the carriers “cost to serve” your business.
3. Don’t be afraid to ask for help. Reach out to people that know what the carrier networks look like and which carriers make the most sense for your company.
In several Two Minutes Warnings, we have pointed out that with carrier networks constantly changing, it is important for shippers to understand how their freight fits in a carrier’s network. If you are too busy or wondering how to get the information you need to make good business decisions, there is a solution: ASK FOR HELP! At TranzAct, we love to help and support shippers who are looking to get better and to lower their costs.
For those of you who are attending CSCMP Edge, we look forward to seeing you at our Session on Tuesday at 10:30am. And if anyone has any questions on LTL sourcing, or LTL issues highlighted in our interview with David Ross, or anything else, we encourage you to get in touch.
BY MIKE REGAN, CO-FOUNDER OF TRANZACT
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