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Consumer Goods Logistics Blog


Straight Talk on Freight Rates and Carrier Metrics

Published by Larry Catanzaro on August 20, 2015

OK, it's time for some straight talk on freight rates and carrier metrics.

Remember when you were a kid and you did really well on a big test? Let's say you got 97%. Chances are the paper had a few gold stars from the teacher. Maybe even a smiley face sticker.

Wow, 97! That's almost perfect.

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Your parents were happy. They may have even taken you out for ice cream.

"Is our Joey Harvard material?"

Now, fast forward to today. You're at your desk scouring through carrier performance charts and you spot 97% on-time performance for one of the months.  Yikes!  97% puts the carrier on probation.  At 98%, they've probably got some work to do.  99% is expected these days.  It keeps carriers in the game. 

Demand superior carrier metrics

There is absolutely nothing wrong with demanding stellar carrier performance and metrics.  Your retail customers demand it.  What seems incongruous, however, is that carriers today are still largely chosen on who has the lowest rate.

There's a cost to 99%.

  • reliable drivers who don't turn over at the current industry rate of 97% for large carriers (ATA)
  • advanced transportation management systems to carefully plan and optimize routes
  • dedicated freight management professionals who take ownership and are accountable

And there's a payoff to 99%:

  • it makes retailers happy and more inclined to expand the relationship due to your excellent report card
  • it reduces chargeback penalties
  • it frees up your time to focus on strategic issues, not fighting fires

Choosing carrier partners wisely

By all means, demand superb performance from your carriers.  And set the bar high for carrier metrics.  But when evaluating responses to your next RFP, look beyond a carrier's price.     

Zero in on the carriers who have invested in the training, systems, and infrastructure to deliver superior performance.  Then, have this short list of carriers sharpen their pencils to deliver at a competitive rate.

LTL-secrets-revealed-CTA

 

Filed under: Freight Transportation