Choosing a carrier to ship with can be a challenging decision with lasting implications. A shipping partner will have a considerable impact on the day-to-day operations of your business. With so much at stake, it’s important you take the time to analyze and evaluate each of your options and select the carrier that will best fulfil your organization’s capacity requirements and supply chain needs.
To assist you with the evaluation process, we have designed a guide that analyzes several of the most important factors to consider as you select a carrier. Based on your business needs, you will be able to determine the most important factors and criteria to use when evaluating those factors.
Factors to Consider When Choosing a Shipping Carrier
1. Cost, Quality and Time
Pricing is a determining factor when choosing a carrier to ship with and is usually among the first inquires we receive. There are, however, two additional items to prioritize when deciding on a carrier.
It is important to also consider both quality and delivery time, in addition to pricing. As a shipper, you need to identify your business’ needs and the factors you find most important. If you choose to ship with the least expensive carrier, you could be sacrificing quality and delivery time.
Keeping these factors in mind when evaluating potential carriers will reduce the risk associated with selecting a new carrier. It is important to analyze your business and its supply chain needs before seeking a carrier. This will help you narrow down your options and determine which carrier will be the best fit.
2. Services Offered
What services does your business require? What transportation services does the carrier provide? Can one company handle all of your needs, or do you need to work with multiple shippers to move your freight? If your business requires more than one service, working with several companies will increase both your time investment and your cost. It may be beneficial to work with a carrier that offers multiple services, and can meet all of your company’s needs.
Does the shipper have high level of service (LOS) rates? Your business depends on the timely arrival of your freight to various destinations. A reliable carrier can help to build your company’s positive reputation and in turn, grow your business and meet your customer expectations. Imagine shipping with a carrier who has a lower cost, but can never deliver your load on time, causing your freight to miss its inspection window, and not make it to market on time. Sure, you may have saved money in the short term, but in the end, this unreliable carrier will end up costing you more money in late or spoiled loads, and even worse, your company’s reputation.
Choosing a carrier who provides transparent communication about your shipment is important, as it keeps the carrier accountable for the load and keeps you in the loop as to your shipment’s status.
Recent trends show the demand for transportation services far outweighs the current supply. The Conference Board of Canada suggests that by 2020, the gap between the supply and demand of truck drivers is expected to be 25,000, resulting in a capacity shortage. As we prepare for an even greater shortage, it is becoming essential to secure capacity now.
Not every carrier will be a good candidate for your business. Some carriers are stronger than others in certain regions. Finding a carrier with a network that includes the lanes your freight will travel on is crucial to establishing a profitable relationship for both parties.
What does safety mean to you as a shipper? Imagine two carriers: One has lower rates, but is known to fudge their logbooks, breaking the law in order to get to the location on time. Additionally, the company’s accident rates are higher than the industry average. The other carrier has slightly higher rates, but uses electronic logging devices (ELDs), meaning their drivers are 100 per cent legal, and has one of the top safety ratings in North America. What company would you choose? Just as safety is important to you as a shipper, it’s equally important to your customers, too. Shipping with a carrier that prioritizes safety can help to build your supply chain image, leading to increased sales.
Customers pay attention to a company’s safety rating and are inclined to ship with companies that have a safe reputation.
Does the carrier follow sustainable practices and are they environmentally conscious when it comes to their transportation solutions? How is the carrier demonstrating their environmental commitments and is it measurable in a way that can be evaluated? Shipping with a carrier that prioritizes sustainability and environmental awareness can help to build your supply chain image and lead to increased sales.
Customers pay attention to environmental sustainability and, just like safety, are inclined to buy with companies that have a reputation of being environmentally friendly.
7. Carrier Stability
How long has the carrier been in the marketplace? Do they own their fleet of trucks and trailers and can they provide reliable and stable warehouse space for your goods? How do they compare to other carriers in the industry and are they able to offer competitive rates and service?
Choosing a carrier that is stable in the marketplace is essential to the continued service of your business’ transportation needs. In the long run, it won’t be beneficial to ship with a carrier that is low cost but unstable. It’s likely that they’ll struggle to consistently provide capacity to your company, or worse, go out of business, forcing you to restart your carrier selection process.
8. Asset vs. Non-Asset-Based Carriers
Asset-based carriers own all of the equipment needed to transport your freight. Non-asset-based carriers outsource the transportation services to asset-based carriers and do not necessarily own the equipment being used to transport your freight.
In a non-asset-based carrier situation, there will be more hands on your freight, leaving more room for error. Asset-based carriers will ship your freight on their trailers, pulled by their own trucks, driven by the carrier's drivers.
Download this printable checklist to make sure you cover all your bases when choosing a carrier.