Becoming a Shipper of Choice: 3 Best Practices

Pieter Kinds

Pieter Kinds

August 2, 2016 - 19:49

Carriers prefer to work with shippers that pro-actively support their business in today's Supply Chain environment. But how do you become a Shipper of choice? Here are some tips and best practices!

What is being a shipper of choice?

The principle of being a Shipper of Choice is all about demonstrating the desire for cooperation and partnership. With other words, shippers should be fully committed to partner up with their Carriers in order to gain competitive advantage. A "partnership" implies two or more parties working closely together in order to achieve common targets. To ensure alignment, it is indispensable to both aim for the same target, achieve open lines of communication and to harbor mutual trust.

How to become a shipper of choice?

In this post, we have highlighted three best practices for logistics and supply chain professionals that will enhance mutual beneficial relationships between Carriers and Shippers.

1. Invoice Payment: On-time and faster freight invoice handling

As pointed out in the introduction of this blog, communication and visibility are of course the backbones of any solid partnership. But if you ask Carriers what really makes a shipper of choice, their absolute number-one answer will be on-time freight payment. Getting paid according to the contract terms is becoming increasingly important, so treat your carriers like customers!

Tip: By using an electronic freight audit & payment solution, you can easily streamline all aspects of the freight payment process. From invoicing, issue handling, extra costs management to billing. Thanks to a pre-audit and payment solution, both shippers and carriers gain from a collaborative and cloud-based invoicing solution that allows them to quickly solve issues, with clinical freight data (business intelligence) always within reach.

Pre Freight Audit process

The pre-freight audit is a process where the carrier sends its electronic pre-invoice to ControlPay for auditing. We receive the shipping data (via ERP or TMS) as well but it is not a prerequisite for this process. From the carriers, we receive an electronic pre-freight invoice file. The pre invoice file can downloaded from the carrier system or via an interface in different formats such as excel, xml, EDIFACT), whatever is most (cost) efficient. The rating and matching process is the basis for the billing instruction we would send out to the carriers. The carriers then have the option to create an invoice on our freight audit platform or send an invoice via regular means. The carrier also has the option to declare any extra or unforeseen costs that he may have via our extra costs tool.The advantages for both parties are significant. For example:

  • Problems can be identified and fixed before final invoice creation
  • Cancelled and missing shipments could be identified
  • Three Parties are involved into the process (Shipper, Carrier and ControlPay)
  • Freight audit is made before the time when Carrier creates invoices for payment

Freight Invoice Auditing and Specific Extra Features

2. Procurement Practice with a long-term view

Freight Procurement is NOT the same as procurement of materials or services! In the face of the increasing capacity shortage, rising compliance regulations and equipment costs, carrier relationships matter more and more in today's logistics landscape. Large carriers receive stacks of RFP's every day and you don't want to end up at the bottom of the table. If you can shorten the analysis time for carriers, they're more likely to respond quickly and with a higher degree of detail to your bid request.

Keep in mind, cheaper isn't always better!

With this in mind, freight procurement is not about hammering down carriers rates or simply to benchmark rates and not awarding them. The goal should be improving the security of supply with your transportation partners. Tip: A state-of-the-art e-sourcing solution, specially designed for all transportation modes, is a big winner for best in class shippers!

 the eight steps that changed procurementSteps towards a successful Sourcing Strategy

3. Optimize delivery program

Don't underestimate the importance of accommodation! Providing flexible and carrier friendly regulations go a long way in a strategic relationship.

1.Try to schedule flexible appointment windows. This makes it easier for carriers to optimize loads schedule deliveries.

2.Improve arrival and departure times. Offer an accurate and efficient system to establish arrival and departure times. Approach arrival and departure times systematic and share the outcome with your carriers.

3.Provide options for drivers. Securing your yard with 24/7 access for carriers and backhauls is a great way to help the flow of traffic in and out of your facility.

4.Create fixed times for regular deliveries. Work closely together with your high-volume transportation carriers is a huge pro when it comes to strategic relationships. Therefore, create a regular time slot for those carriers and enhance operations planning.

ControlPay - Global Freight Audit Provider

If you like to read more about freight invoice auditing or other logistics topics, visit our blog page or take a moment to dive into our logistics content hub. This is where we share daily tips, tricks, insights and important news of the logistics and Supply Chain Industry.