As a freight forwarder, a key part of your role is providing a smooth and stress-free shipping experience to your customers. However, since you’re not directly involved in the physical processes that go into transporting cargo, that means finding the right partners for the job.
Evaluating carriers is a difficult task. With the abundance of options at your disposal, it’s hardly feasible to compare each of them individually. Let’s talk about how you can leverage data to choose the right carriers and make sure your partnerships are working for you.
Building a data-driven process to assess your carriers
Finding a reliable carrier in the first place is no small task, especially in times when container space is limited. Even still, simply finding the cheapest option with available space isn’t always the best solution. While it may work in the short-term, insufficient vetting can also lead to unexpected issues and delays later on in the process.
Not to mention, building and maintaining strong provider relationships is a key value-add for many customers. In an editorial JOC article, global supply chain director Daniel Krassenstein advised shippers to choose a diverse set of forwarders based on their carrier contracts.
Based on this strategy, it’s often advantageous to build ongoing relationships with dependable providers. That’s why it’s important to establish your own process to select and evaluate carriers in your network.
Pre-screen potential carriers
Before working with a carrier, consult your resources to vet their services. Unfortunately, at this stage in the process, detailed insights can be hard to come by. While many TMS solutions offer features to compare rates within the application, it can be difficult to locate any data beyond that. Similarly, tools like ShipMatrix that offer performance-driven metrics can be pricey.
Instead of spending time and money hunting down carrier data, you can request information directly from potential carriers. While more data is always better, try to prioritize information that can give you insights into the carrier’s qualities– especially potential problems that may arise.
Some key areas to consider when choosing a carrier may include:
- Tenders accepted vs. tenders declined
- Number of damage claims
- Sustainability efforts (ex: emissions, route optimization)
- Routing guide compliance
- Variety of equipment and resources available
Collect data throughout the shipment process
Pulling aggregated data from external sources, while helpful, can be difficult and expensive. Fortunately, you can get around that by collecting data from your own shipments, especially as your operation grows.
For every carrier you work with, start keeping track of critical metrics related to their shipping performance. Start with KPIs to measure consistency, such as percentage of on-time shipments. You can even break down performance further by looking at time from pickup to departure, or percentage of on-time pickups, departures, and deliveries.
Additionally, look for a way to evaluate each carrier’s pricing structure. On top of monitoring invoice accuracy, keep track of accessorial charges (fuel, permits, etc.) as a percentage of total freight cost. If your carrier doesn’t provide you with a breakdown of your fees, feel free to request it. Changes in this ratio can act as a signal for you to take a closer look at your processes or ask your carrier about changing prices.
Continuously run analyses
Once you have a system set up to collect data from your shipments, it’s time to figure out how to use it to gain insights on your carriers. Instead of running periodic analyses by hand or with Excel templates, look into building dashboards to constantly monitor trends. That way, you’ll be able to keep an eye on your carrier performance without creating a report every time.
If your organization relies on a limited tech stack, you can still generate real-time insights by connecting your internal data to a business insights tool like Tableau or Power BI. These will enable you to create dashboards that your whole organization can access. On the other hand, if your team’s software is more advanced, you can seek out a logistics-specific solution with analytics features, such as a TMS system or a CX platform.
Building up a reliable set of go-to carriers is essential to succeeding in the freight forwarding industry. As container rates rise, forwarders are increasingly seeing carriers cancel their orders to make room for more lucrative opportunities. However, as some carriers strive to maintain mutually beneficial partnerships, prioritizing reliability on your side can give you an edge.
Leveraging data is critical to figuring out which relationships are worth maintaining, and which ones you can cut off. Check out the Logixboard blog to find out more about how to make the most of your data: