The task of selecting transportation suppliers is present in nearly every company. Although many companies have specific policies and processes for evaluating and selecting suppliers, the vast majority opt to select their transportation suppliers on the basis of cost only.
Executives who evaluate their transportation providers with more scrutiny generally experience a more successful business.
Having reliable transport providers not only means that you get a good price and reasonable delivery times, but good providers will often continue to serve you as your company grows, which gives you the security of maintaining consistency in your business.
Remember that you are not only selecting a carrier or freight forwarder, you are selecting a partner who will be involved with the most valuable assets in your company: raw material, the finished product and your customers. A good transport provider ensures that the raw material or finished product arrives safely and on time to your destination. This provider represents your company at the time of delivery and needs to make a good impression. If the freight is late or the product is damaged because of their mistake, it is you who is on the line and whose reputation is at risk.
Call their references
When asking for references, be sure to take the time to place a phone call to each one and ask questions, such as in what situations the supplier has been useful, how long they have been doing business together, how claims were resolved and what percentage of their trips saw the goods arrive on time and in good condition.
Request and evaluate financial statements
This is especially applicable if you are considering implementing the provider within your strategy and move many loads a month, especially if it is freight forwarder or freight broker.
Investigate credit history
It is important to analyze the behavior of the supplier with their own suppliers and to see if there have been any legal issues. This will give you relevant information which will allow you to ask questions important to your operation.
Each country uses different providers of commercial reports. If you would like to suggest a company, please send me an email at [email protected]. Be sure to include the city, state or province and country where your supplier is located.
Check the insurance coverage
Regardless of the mode of transport, the provider must have insurance policies to protect against a wide range of circumstances. They may offer life and accident insurance for their employees, civil liability, theft, credit, and their tractors.
If the provider does not have insurance policies, it may be an indication that the company is not financially sound or lacks the foresight to predict inevitable mishaps in operations.
Find out your provider’s policies regarding merchandise mishaps; for example, damage to your goods, theft, missing and/or undelivered merchandise, and property damage.
If your provider can sell a policy for your merchandise, compare the cost, type of coverage, deductible amounts and claims processes.
Ask the size of the vehicle fleet
In the case of land freight transport it is important to know how many units your carrier owns. If the carrier does not have sufficient units to meet their needs, they are more likely to subcontract out to another carrier without your knowledge, which can lead to major complications. Ask about the number of tractors, containers (dry or reefer, depending on the type of service your business needs) and terminals.
Inquire about their technology
The transport provider that operates with modern technology is a reflection that they are committed to quality service. Many companies provide a customer portal where you have the opportunity to develop historical reports, make service requests, submit complaints and make order clarifications. You may also be able to track your units with satellite and paging features if you are given access to the system, which can be very helpful.
Perhaps the amount of details involved in the decision-making process of evaluating potential freight transportation providers seems daunting. In practice, though, I think you will find it’s not as difficult or tedious as it may sound. Above all, the effort and time spent devoted to this will be well worth it when you experience the peace of mind knowing your decisions were well-researched and thoughtfully planned out.