Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Posted by on in Freight Bids
  • Font size: Larger Smaller
  • Hits: 1103
  • 0 Comments
  • Print

Freight Bid Tip # 7. Establish Backup Carriers for Most Blocks of Business

b2ap3_thumbnail_Trucking-Companies.jpg

We live in an ever-changing world. Trucking companies come and go. They are being bought, sold, merged, downsized and resized every day. Under new management, a company may flourish or deteriorate. In this era of driver shortages, carriers are being very deliberate about how they allocate their capacity. As they focus on yield management, this precious capacity is being supplied to the carriers' most profitable customers.

In addition, trucking companies are constantly adding and losing business. A trucking firm may add a new account tomorrow at a higher margin than they are receiving from your business. This may cause them to make their capacity more readily available to another client. The bottom line is that it is always prudent to prepare for a “rainy day.” In other words, there is value in having backup carriers for most of your business.

This means that it is critical during the rounds of bidding, to smooth out the variances in rates between your “low bidders” and the others who were on the short list. By doing this, it reduces the cost differential in making a switch for any of a variety of reasons (e.g. poor service, carrier goes out of business, de-markets certain lanes etc.).

It should also be kept in mind that a carrier will not be too motivated to serve your company if they are a backup carrier in name but receive no freight. To achieve success with freight bids, carefully determine your primary and secondary carriers. This should include both asset and non-asset based providers.  While the temptation is there to give all your freight to the low bidder, to maximize savings, this can be a risky strategy. Where possible, select primary and secondary carriers. Give your backup carriers a reasonable volume of freight so as to keep the primary carriers “honest” and to keep all of your transportation providers engaged in serving your company.

 

To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (http://paper.li/DanGoodwill/1342211466).

0

Comments

  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Tuesday, 22 August 2017

Most Recent Posts

Search


Tag Cloud

Education UP Omni Channel Whole Foods Rate per Mile Canada U.S. trade Canadian truckers Consulting Business skills FMCSA driver energy efficiency 2014 economic forecast Map-21 Freight Capacity Outsourcing Sales freight rate increases MBA transportation audit Deferred Packaging broker bonds Career Advice intermodal hiring process Sales Management carrier conference Doug Nix Loblaw Training shipper-carrier contracts Freight Management Canadian economy professional drivers 2013 Economic Forecast NCC Entrepreneur Regina Canadian Transportation & Logistics Stephen Harper Trade Vision FuelQuest Transportation small business Dedicated Contract Carriage Canadian freight market CRM Transplace derailments marketing driverless dynamic pricing CP Rail ProMiles freight agreements President Obama TMS TMP Worldwide freight payment freight audit Trump fuel surcharge David Tuttle shipper-carrier collaboration Transportation Buying Trends Survey Management Crisis management capacity shortage Horizontal Supply Chain Collaboration CSX freight broker Canada Freight Rates NMFC $75000 bond Retail US Economy 2014 freight volumes freight costs transportation newspaper Wal-Mart Finance and Transportation FMS Emergent Strategy CN Grocery freight forwarders Shipper bulk shipping Dan Goodwill economic forecasts for 2012 Crude Oil by Rail US Housing Market Toronto freight bid trucking company acquisitions Right Shoring LCV's freight RFP shipping wine solutions provider cheap oil robotics truck drivers RFP autonomous vehicles routing guide Surety bond MPG JB Hunt Twitter CSA Conway TransForce Facebook peak season Werner Tracy Matura freight audit Climate Change Global Transportation Hub Sales Training consumer centric future of freight industry customer engagement Donald Trump Carriers Hudsons Bay Company automation Failure Otto Social Media in Transportation buying trucking companies EBOR Social Media Freight Carriers Association of Canada Microsoft Scott Monty freight transportation conference BlueGrace Logistics FCPC Doug Davis Associates US Auto Sales Masters in Logistics Derek Singleton Freight Matching Rail e-commerce Truckload ShipMax Colilers International Load Boards Driving for Profit Training New Hires home delivery Business Strategy Transportation service Success Broker Accessorial Charges Comey Celadon Railway Association of Canada freight transportation in 2011 shipper-carrier roundtable Trucking BNSF mentoring home delibery Inbound Transportation CN Rail US Election Transloading 2015 Economic Forecast Amazon freight payment Keystone Pipeline Canada-U.S. trade agreement YRC Global experience 360ideaspace pipelines APL Transcom Fleet Leasing Warehousing 3PL Retail transportation Cleveland Cavaliers Bobby Harris FCA Driver Shortage Sales New York Times Job satisfaction employee termination 2012 Transportation Business Strategies. Jugaad online shopping Infrastructure broker security IANA Politics freight cost savings Freight contracts the future of transportation dimensional pricing Swift coaching Harper Davos speech Packaging Schneider Logistics US Manufacturing LTL 3PLTL 2014 freight forecast KCS Load broker network optimization business start-up Blogging Freight USA Truck rail safety Success failure entrepreneur Muhammad Ali NS Dedicated Trucking Leadership tanker cars Spanx Transport Capital Partners (TCP) Freight Recession capacity shortages Yield Improvement selling trucking companies Canada's global strategy Life Lessons Adrian Gonzalez transportation news drones CSA scores last mile delivery Search engine optimization Distribution Rotman School of Business Freight Shuttle System Fire Phone Ferromex CITA Shipper Pulse Survey financial management driver shortages economy freight transportation NAFTA shipping Reshoring University of Tennessee LinkedIn truck driver Software Advice trade Business Transformation Strategy

Blog Archives