Ad Hoc Shipments: How to Set Controls and Why It Matters Now More Than Ever

Not so long ago, ad hoc shipments tended to be few and far between. Sure, they were often costly when they did crop up, but they were so rare that many supply chain managers were comfortable simply writing them off rather than building a robust process to manage them.

That might have worked before, but it’s a dangerous approach to maintain moving forward. As product release cycles continue to tighten and shifts in demand become increasingly volatile, the number of ad hoc shipments coming in is likely to increase. Without any structure around how to manage them, shippers risk paying a high price.

No structure means no limit on potential problems

Today, many shippers manage spot quotes the old-fashioned way: by picking up the phone and seeing what their go-to carriers will charge. On the surface, this may seem like the simplest way to handle things—but it can open the door to all manner of problems.

For one thing, the rate carriers cite over the phone tends to be the base rate. It doesn’t include additional charges that might appear on the final bill, and it doesn’t account for things that could be done to bring costs down, like agreeing to a longer transit time that still gets the goods to their destination within the timeframe the customer requested. Exploring every possible option and scenario over the phone just isn’t practical, which explains why many shippers just agree to whatever their carrier offers and wince at the bill later. After all, the very nature of ad hoc shipments often means they need to get out the door quickly—there’s no room for endless research and negotiation, right?

A lack of structure also creates the small but nonetheless real possibility of employees committing fraud. While most staff wouldn’t dream of this, some shippers have learned the hard way that without having a clear process for managing ad hoc shipments, it’s all too easy for one bad apple to strike an off-the-record deal with one of their contacts to pay an inflated rate and pocket the difference. Other employees have been known to go rogue and pay a much higher rate than they could elsewhere in a misguided attempt to preserve a relationship with a carrier. Behavior like this isn’t the norm—but even when it’s the exception, it can do real damage to the bottom line if no one is aware of it.

A process is only valuable if people follow it

In some instances, shippers do have a defined process for managing ad hoc shipments. But without controls in place to ensure the process is followed, it may be little more than words on paper.

Using a transportation management system (TMS) with a built-in spot quote tool, shippers can establish much-needed structure. A TMS allows teams to quickly source quotes for ad hoc shipments and explore different scenarios—like longer transit times and multi-modal options—to identify the best fit. When they find an option that checks all the right boxes, they can ensure that the agreed-upon rate is captured and communicated accurately to avoid surprises on the invoice later.

Importantly, shippers can also use their TMS to trigger an automatic approval process for ad hoc shipments. That way, leaders have visibility, and no facilities or individual team members can act in a vacuum—ensuring the process will be followed.

Establish a better process for managing ad hoc shipments

After the major wake-up call that was the global pandemic, smart supply chain managers and leaders are asking themselves, “What can we do to be better, build resilience, and take our operations to the next level?” Building structure and establishing clear expectations where there were none is a great first step—and having the right tools and solutions to support that approach is even better.

CTSI-Global can help. We’ve helped countless shippers create structure, processes, and controls to elevate their operations and support a healthier bottom line. We combine leading-edge logistics technology with an experience-driven, consultative approach, allowing us to partner with companies to find the solution that suits their unique needs.

Don’t settle for “okay.” Build a best-in-class supply chain by contacting us today.

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