5 Dynamics to Consider When Selecting a Shipping & Logistics CompanyWritten by Neal Willis
Selecting the right shipping and logistics company can be a challenge, especially since there are so many to choose from. When selecting a logistics company for a partner, you’ll want to make sure their business model is aligned with your transportation strategy. If your strategy is to provide low cost products without sacrificing quality, you’ll more than likely want to work with a shipping and logistics company who provides value other than just a low cost shipping option. Five other important dynamics to consider when selecting a shipping and logistics company include: Technology, Location, Pricing, Capacity and Reputation.
Arguably, one of the most important functions to consider when selecting a shipping and logistics company is their technology offerings and capabilities. You’ll want to make sure they have the ability to support not only your current operations, but also the resources and infrastructure in place to support future business growth as well. The best shipping and logistics companies offer flexible and scalable solutions.
It nearly goes without saying, but the shipping and logistics company you’re partnering with should be familiar with the geographic area in which you operate and have the staffing and resources available to support your business within your geographical territory.
Price is often the main concern for companies looking to partner with a shipping and logistics company, but all too often companies look at the price of the freight rates and don’t consider the cost of the shipping and logistics companies’ services. The price of the freight rates are certainly important, however, lower freight rates can be irrelevant if accompanied with poor service and costly contractual obligations. Another thing to consider is the length of time for which the pricing is valid. Low freight rates are great, but they need to be locked in for a decent amount of time in order for savings to be truly realized. If the freight rates aren’t valid for long, then neither are the savings.
Companies often assume that shipping and logistics companies have the capacity to meet their requirements, but that’s not always the case. With LTL capacity already tight and the ELD mandate being implemented in December, capacity is a real concern for shippers and an issue that shouldn’t be overlooked. A good shipping and logistics company should be able to demonstrate carrier partnerships with committed capacity available to meet their clients’ needs, no matter the timing.
The logistics industry has become increasingly consolidated over the past few years, but that doesn’t mean you have to sacrifice service with size. Just as companies often service unique markets that cater to a specific demographic, shipping and logistics companies often times specialize in certain niche industries and can service those industries better than their competitors. Take a look around at your competitors in your market and see what you find. No matter the industry, chances are that there’s a couple of shipping and logistics companies who are servicing the industry better than others because of their expertise in that specific market. When selecting a shipping and logistics company, look for one with a proven track record. A reputable shipping and logistics company should not have a problem with providing a potential customer with a reference or customer testimonial.