Breaking up is hard to do. But when staying together is hurting the bottom line, separation is a necessary part of business. At some point, all supply chain managers have to look at the relationships they’ve forged with their suppliers and carriers and determine whether those relationships are still driving profit and growth. If they’re not, it may be time to make the switch.
To avoid souring a relationship unnecessarily, here are a few things to consider before ending a carrier or supplier partnership—and some strategies for handling the situation delicately.
Ask whether the relationship is still mutually beneficial
Loyalty can be a powerful tool in business. Wielded correctly, it can help shippers secure the best rates and guarantee efficient and reliable shipping lines. But when the balance tips too far in either direction, that loyalty can become an anchor that drags one party down.
Some shippers will stick with partners that are no longer holding up their side of the bargain simply because it’s easier than finding a new one. Others will stand by them for sentimental reasons that may not be reciprocal. And there will always be some who aren’t monitoring the relationship at all and are totally oblivious to the fact that it isn’t delivering the value they’d hoped for.
When supply chain managers focus on monitoring and maintaining relationships, it quickly becomes obvious when one isn’t working out. At that point, they can step in and try to redress the balance. And when that isn’t possible, they can start looking elsewhere.
Consider if switching will pay off in the long run
Every carrier and supplier has dealt with a customer that jumps ship just to get a minuscule price reduction elsewhere. And those reductions can prove to be fool’s gold, with prices leaping up after the shipper has taken the bait.
Competitive doesn’t always mean the lowest price. It’s important to take factors like service standards and long-term sustainability into account when deciding whether a relationship is still competitive and worth keeping.
Of course, even the best customer service in the world won’t matter if a partner’s rates become completely uncompetitive and unsustainable. That’s when shippers should return to the negotiation table to see if a compromise is possible. If not, parting ways on friendly terms may be the best thing for both sides.
Focus on transparency to maintain trust
When it’s time to leave, honesty may be the best policy. But a delicate touch is also required.
Shippers should be direct with suppliers and carriers when ending a relationship. Rather than dancing around the issue, they can ensure a clean break by explaining honestly why they’re looking elsewhere.
Suppliers and carriers know that business needs change. A scope may shrink, or a project may be benched to focus on other priorities. In those instances, focusing on the facts can prevent a breakup from feeling personal.
If a contract has been breached or a partner’s performance has been consistently poor, the conversation can get a little muddier. Providing some constructive feedback may be beneficial for the partner, giving them a roadmap for future improvements. But it’s important to deliver feedback carefully to avoid leaving on a bitter note. If there’s a potential that it will lead to bad blood, it may be better to avoid the conversation altogether.
Keep the door open and an eye on the future
Great relationships with carriers and suppliers hinge on mutual respect. When that respect carries over even after severing ties, shippers have the option to reinstate the partnership if the right opportunity later presents itself.
An adversarial breakup doesn’t benefit anyone. Luckily, there are steps shippers can take to avoid having those uncomfortable conversations at all.
At CTSI-Global, we help shippers maintain strong bonds with their preferred carriers by streamlining communication, enabling faster payment processing, and finding avenues for savings—like load optimization—that don’t hurt either party’s bottom line. And by tapping into our vast carrier network, shippers can take advantage of the relationships we’ve built over our 60 years in the industry to gain access to rates that they won’t find elsewhere.
Build bridges, not walls. Contact us today.