Why Executive Participation Is Needed In Freight ManagementWritten by Neal Willis
Much of the freight management process involves communication and relationship building. Especially for companies that operate in several geographic regions with multiple locations, freight management can be challenging. A centralized freight management policy can help to overcome some of the challenges.
While staying away from day-to-day operations, the involvement of “C” level executives with freight management policy and key decision-making allows for a more holistic approach to freight management where the company’s leadership can best align strategic business goals with the goals of the transportation department keeping the organization moving forward as one unit in synchronous harmony.
Freight management is not just about lowering and controlling cost and improving operational efficiencies. Freight management is also about building relationships with carriers, vendors and customers and, at minimum, meeting the respective expectations of each. While they are often challenged with making new contacts and building new connections, shippers are constantly obliged to nurture and grow rapport with existing vendors, carriers and customers alike. The relationship building piece is one of the most important aspects of freight management, yet it is one of the most difficult parts to measure for effectiveness in terms of dollar value and cost. It’s fundamentally impossible to place a dollar value on relationships and customer retention and satisfaction levels, however, you can quickly add up the costs when something is missing, such as not having a relationship with a carrier who can cover last minute load requests for key customer shipments.
Often times, freight transportation is viewed as an area that’s not within the “C” level executive’s wheelhouse. It is commonly associated with the purchasing or traffic department, and is left up to only the purchasing or traffic manager to handle, which isn’t always a bad thing. However, this can be a problem if there is no emphasis placed on the long term aspect of freight management and the relationships being built amongst businesses and customers.
Unfortunately, people often look at only short term costs and fail to see the long term, intangible rewards and benefits of the relationship with a freight management company. Just as customer satisfaction levels are tough to gauge, so are the long term cost advantages of partnering with a freight management company. Choosing the right 3PL or freight transportation management company can be one of the most challenging issues that shippers face. Quite frequently, companies fail to recognize the importance of freight management as a key business function that affects every aspect of a business, from accounting to customer service, making it the chief reason why more executives need to get involved with their company’s freight management.