When capacity is tight, shipper-carrier relationships can quickly become tense and unproductive. Between the impact of the electronic logging device (ELD) mandate, the ever-worsening driver shortage, and rising demand from shippers, there simply do not seem to be enough trucks on the road—and companies are feeling the burn.
Rising shipping costs are just the beginning. The ability to scale capacity can be invaluable to shippers that experience periodic jumps or high-volume seasons, or that have an eye toward long-term growth. But the current capacity crunch is making it increasingly difficult to scale successfully.
As part of our ongoing series on how supply chain efficiencies can lead to a competitive advantage, let’s dive into how shippers can navigate capacity concerns with ease to maintain a high level of service, build stronger relationships with their carriers—and come out on top.
The double-edged sword of scaling
On the surface, a sudden influx of orders sounds like a dream come true. But when shippers are not prepared to scale quickly, that surge can become a wave that drowns them.
For starters, most shipper-carrier contracts have negotiated rates tied to a certain freight capacity. Exceeding this limit can be excessively costly.
Costs will only increase if a company does not have a long-standing relationship or locked-in rates with the carrier. And if a shipper only works with a select few carriers who are unable or unwilling to accept an additional shipment, especially at short notice, then they may be forced to lean on a more expensive, unvetted option.
Add to that the additional hours employees have to invest in sourcing rates, and by the time the shipment is arranged, a company may have not only lose dollars, but delay the customer’s timeline as well. This can leave a permanent stain on a company’s reputation. And if the organization runs into this problem consistently, it may be labeled unreliable by its customers—leading them to take their business elsewhere.
Easing growing pains
Failing to prepare or establish processes for handling shipping fluctuations can rapidly start to impact a company’s finances and customer relationships. To avoid a small increase in demand spiraling into a serious problem, companies need to have a plan in place to help them scale.
One strategy that’s worth exploring is diversifying the carriers a shipper works with. Rather than relying solely on one or two preferred carriers, companies can start vetting and getting quotes from other carriers early to avoid scrambling when they need them the most. Utilizing CTSI-Global’s network of pre-vetted carriers becomes a no-brainer strategy for minimizing the need to take on that process.
In some instances, spot quoting can also help shippers find more competitive pricing when a sudden increase in demand may leave them paying a hefty rate to their usual carriers. In general, spot quotes (vs. contracted rates) leave shippers at the mercy of the market—especially as we go into peak season for rates (starting in September and October, and full force in November and after Thanksgiving). So utilizing that pre-vetted carrier network becomes all the more important.
Using predictive analytics to benchmark historical trends can also be a long-term strategy for predicting spikes. Business intelligence data lets savvy shippers anticipate and plan, which can make all the difference.
Eliminating capacity concerns, increasing efficiency
Finding reliable, cost-effective carriers in a pinch can be tricky. But with the right partner, it gets a lot easier.
CTSI-Global has spent over 60 years cultivating relationships with carriers, and we leverage those relationships to help our clients scale with ease. With a network of over 20,000 pre-vetted carriers, we can help companies sidestep capacity concerns and unlock rates they won’t find elsewhere.
We also offer outsourced Carrier Management services to help shippers become even more efficient. Whether they’re shooting for long-term scaling goals or just need to navigate a short-term surge in activity, we take care of all the details so our clients can focus their energies elsewhere.
Don’t let limited capacity slow vital growth. Contact us today.