While shipping and logistics managers have numerous options and channels to choose from, some are still getting caught up in false promises surrounding their business and potential savings.
It’s come to the point that some carriers or brokers are offering huge discounts for shippers that only use their services. We’re not naming any names here, but the fact of the matter is, falling into the trap of discounts in exchange for a sole carrier partnership, doesn’t usually pan out - and can actually end up costing you.
Falling into the trap of a single-carrier strategy
Unfortunately, many shipping and logistics managers agree to take a single-carrier approach to their logistics operations. When you look at the promises made by these carriers and brokers, though, it isn’t difficult to understand why some shippers become convinced that this is their best option.
Carriers and brokers will tout all kinds of advantages of a single-carrier relationship in order to get shippers on board, including “benefits” like:
- A stronger and less complicated supply chain: Carriers might claim that keeping all shipments with a single company will help reduce complexity in the supply chain and forge stronger relationships.
- Deep discounts: This is the main reason shipping and logistics managers will opt to put all their shipment eggs in a single carrier basket. Brokers or carriers will promise considerable price cuts on shipping rates as a reward for dedicated business.
What actually happens: Rate creep
However, the primary issue with these single-carrier relationships is that carriers may initially follow through with the promised deep discounts - but these price reductions often don’t last.
It’s something we like to call “rate creep,” where rates increase incrementally, right under shippers' noses. The problem, though, is that because shipping and logistics managers have tunnel vision within their single carrier partnership, they might not even notice that this creep is taking place. In other words, without the right visibility into not only the main carrier partner’s rates, but also the rates of other carriers and brokers, shippers simply aren’t getting the best discounts available.
But don’t just take it from us: Transport Topics contributor David Marx noted that competition can be a positive force, particularly for shipping and logistics managers.
“A single trucking company may become lax in handling the shipper’s freight and take that business for granted,” Marx wrote. “This is particularly true in the case of a long relationship between trucker and shipper. Trucker sloth is far less likely when there is competition.”
How to Find Carrier Invoice Discrepancies
Taking advantage of carrier competition
The best option is to compare rates for each shipment on an individual basis.
“While it may seem time- and labor-intensive to reassess your shipping choice every time you receive an order, different shipping carriers can offer drastically different rates based on the weight, dimensions, and destination of your package,” OnlineLabels.com told LaunchGrowJoy.
Thankfully, with a solution that enables shopping and comparison among different carrier partners, it’s not as time- or labor-intensive as you might think to get the best rate for every shipment. A Rate Shopping solution, such as FrieghtPOP’s industry-leading TMS, prevents you from falling into the trap of false rate discount promises, and puts all the information you need to take advantage of competition in the carrier market right at your fingers.
Rate Shopping enables you to shop for broker and carrier services just like you would shop for travel arrangements through Expedia. Best of all, you always have access to the most up-to-date rate information for carriers and brokers across the industry.
Even if you've dedicated a large chunk of your freight business to a single carrier currently, it’s high time you ensured you’re getting the best rates. Don’t become complacent about your carrier partners. Use industry competition to your advantage and get the cost savings on freight rates that you deserve.
To trial our powerful Rate Shopping feature - reach out to us for a free demo!