Article : ‘Customer of Choice’ Trend Picking Up Momentum

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Posted on November 19th 2015 9:00 PM

Better collaboration between carriers, shippers and supply chain partners is leading to more “driver-friendly freight” and higher yields or all parties.

In an article about supply chain partnership trends, Fleet Owner magazine quotes businesses who are feeling the effect of buying power swinging towards transportation service providers and drivers.

“We believe that the trucking industry – and the truckload segment specifically – is starting to experience a paradigm shift where carriers will increasingly be in a more favorable position to choose who they serve and who they provide capacity to,” Paul Newbourne, senior vice president of logistics operations for Armada Supply Chain Solutions, says.

“In our view, it will be even more important than it has been in the past for shippers and receivers to make sure that they are doing everything they can to present themselves as customers of choice for their carriers,” he stresses. “At the core of this is shippers finding ways to help deliver improved efficiency to their carriers while at the same time generating value for themselves.”

[otabox padding=”20″]<< The Ontario Trucking Association recently unveiled a unique multimedia package to assist carriers in communicating driver friendly polices to their supply chain partners and helping them to become “Customers of Choice. Click here for more. >> [/otabox]

Jett McCandless, founder and CEO of CarrierDirect, an advisory firm to trucking and logistics providers, explains that overall there is still little appreciation for the steep increase in motor carrier costs over the last six years. Since the size of the rate increases required to address those costs may be too large for shippers to absorb at once, it’s becoming more important for carriers and customers to establish collaborative initiatives, explains Derek Leathers, president and COO of TL carrier Werner Enterprises.

“We lagged for a time [on rate increase] because we fixed shipment issues,” he explains. “We collaborated with shippers; we worked together to find yield for us and service and capacity for them.”

Leathers stresses that from here on out, “we have to price for shipper practices” in terms of the impact they may have on Werner’s 9,000 drivers.

“We recognize turnover at an account level now,” he says. “We cannot afford to put drivers in a situation where we’ll lose him or her over [shipper dock practices].”

Newbourne adds that there is a safety aspect to such shipper practices as well.
“All the carriers we talked to have a first priority on safety—safety for the public as well as for the safety of their driver,” he explains. “Yet apparently they are still routinely getting loads tendered to them and pressure by certain shippers to do things which would jeopardize safety.”

“This seems like a good opportunity to collaborate to find the right solution to meet that shipper’s needs without exposing a carrier or the public to additional risks,” Newbourne emphasizes.

“Every carrier [Armada talked to] also expresses concerns about the treatment of the driver at shipping and receiving locations,” he notes. “They cite regular reports and feedback from their drivers of unprofessional and/or rude treatment by facility personnel as well as a lack of simple, basic necessities, such as access to restrooms or vending services.”

To combat those and other issues negatively affecting carrier operations, Armada invested in what Newbourne calls a “field services team” that’s focused full-time on identifying trends and behaviors that add value to the supply chains of Armada’s clients.

“They are also responsible for initiating follow-up to make the necessary improvements by engaging those stakeholders to change process and protocols in order to get better results,” Newbourne points out.

“The key to this solution is the collaborative approach with all of the stakeholders,” Newbourne stresses. “It is critical that they always find a solution that is a win-win for everyone. Now, not all of the wins are equal and sometimes it appears one side might give a little bit more. But everyone needs to win.”

Newbourne says there are seven key areas of carrier operation ripe in his estimation for positive change through collaboration with shippers and other supply chain participants. They are:

  • Carrier load/unload dwell time
  • Days of the week shipping volumes
  • Weekend shipping options
  • Holiday/severe weather planning
  • Order lead time and date changes
  • Accessorial cost management
  • Scheduled shipping programs

He stresses, however, that those areas cannot be properly addressed via collaborative undertakings unless the following seven critical points are incorporated:

  • Safety needs to be a priority focus.
  • Operations must comply with the law.
  • Truck drivers need more consideration.
  • Two-way communication is essential.
  • Sustainability is everyone’s concern.
  • Carrier utilization must improve.
  • Customers must be willing to partner with carriers.

Click here to read the full Fleet Owner article.

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