“Everyone is a genius, but if you ask a fish to climb a tree, it will feel stupid its entire life.”
~ Not Einstein
If you wouldn’t request this of a fish, then why on earth would you of your supply chain network providers? A truckload carrier is not going to save you money by consolidating 15 small shipments that all require delivery at 15 different locations. An LTL company won’t be the best option for your final mile treadmill delivery (even if their website propaganda says they are).
The beauty of today’s supply chain ecosystem and the technology that we have all come to rely on daily, is that freight can be optimized! There really is no limit. Since we do not purchase transportation in a box from a department store shelf — why are so many treating it that way?
First, look at what makes the most sense for your business model. Are you shipping regionally, nationally, or globally? It’s more complex than deciding parcel, LTL, or truckload. Understanding your carrier partners and what drives cost for them is vital to requesting of them the things that they excel at (and are willing to give good pricing for). One LTL carrier will build their rates and lane factors different than the next, based on their line haul strategy, terminal network, and freight volumes. Have that conversation with your sales executive. Ask them if they could have any portion of your freight spend — which would it be and why?
The sign of a great business partner and carrier rep is that the good ones won’t lick their lips and say “all of it.” They will recognize and own up to their weaknesses, and focus on their strengths. The really great ones will even recommend an acquaintance or another company that you can reach out to.
Planning ahead and knowing your freight needs inside and out is so important when it comes to matching up the best transportation provider. Usually the best way to mix and match your modes is to run the numbers several different ways to see what makes the most sense. When you want to maximize service, reduce cost, and limit handling — there’s no easy, out of the box answer.
Are you a display manufacturer and need to ship out a big roll-out from St. Louis, MO up into several Northeast states? Look at sending a couple truckloads over into PA and dropping off at an LTL service center, for terminal to consignee distribution.
Are you sending freight across the country and it isn’t super time sensitive? Throw it on a rail network, or a freight consolidator for much cheaper (albeit slower) rates.
Another example. You’ve ordered some wooden patio furniture from an online retailer like BuildDirect. It’s too large to ship parcel, too small for FTL and too fragile for LTL. That is the exact reason their logistics arm – Gateway Supply Chain Solutions has built up a network of final mile carriers that service several major population hubs in the US. They have been doing this for years and know how to pull it off. Gateway is beginning to branch out as well and is partnering with 3PL’s and shippers that are in need of final mile service.
So know when to commit to your carrier partners with services needed that they own and excel at. Know when to shop around to different transportation networks and companies. And by all means — know how to quantify your freight spend so that you are running as lean as you possibly can.