Logistics is an ever-changing industry with many moving parts impacting costs, capacity, and business efficiencies. We asked the experts what the keys to success in today's logistics are.
Relationships in Logistics
The value of cultivating business relationships is often lost in today's digital world. Many logistics tasks are automated or teed up over email rather than phones, removing people from creating personal connections. Nonetheless, shipping can be chaotic, and shippers and carriers alike can expect the unexpected to impact movement many times a year. When situations arise, it is far easier to convince those you have a relationship with to go above and beyond and help you in a crisis than anyone else.
Ed Burns from Burns Logistics Solutions shared with us:
The key to success in logistics is relationships. You need to foster relationships with all of the players – shippers, carriers, consignees, brokers – and understand their goals. If everyone is in alignment, you can reduce costs and improve operational efficiencies. Digital tools can help with this, but they don’t replace the relationships.
At the end of the day, software cannot pick up freight and deliver it to the destination – a tractor-trailer and driver make the deliveries. That isn’t going to change anytime soon. If we lose focus on the tangible equipment making deliveries and focus entirely on technology, we miss the whole point!
Too often, people fail to take the time to build relationships with truckers, brokers, shippers, and receivers. They don't make an effort to make personal connections, which can hinder you in the long run.
A lot can go haywire with freight. A load cannot be delivered as expected, unexpected storage is needed, or a trucker is expected to hold a load and sit on making any movements. You are more likely to negotiate a workable situation for all involved if you have a solid relationship with those people.
As a shipper, there will be times when you need to pull a miracle—when severe weather, driver shortages, or fuel cost issues stop you from moving your freight. Creating personal connections and generally treating your connections well–such as feeding good freight to certain valuable truckers–will serve you well in the long run. You should be flexible when you build relationships with vendors, carriers, and receivers. Be open to learning about what is important to them as you will be continuously negotiating with them as the industry goes through its ups and downs.
Ed Burns also shared his thoughts on the kinds of things carriers themselves should consider when building relationships with shippers.
Relationships with shippers come from understanding their goals in great detail. The decision-maker at a shipper is often under pressure from executives at the company to find carriers cheaper and faster, but that often comes at a price, and the price is service levels. Help your shipper be successful by understanding the level of service they need.
What happens if their product isn’t delivered on time?
What happens if the load doesn’t get picked up?
Who gets blamed for it?
Probably the same logistics manager who is trying to source carriers cheap. The cost isn’t just the linehaul for the load; the cost is delays, missed loads, damaged goods – that can add up quickly when you’re working with a “cheap” carrier. So, what’s the TRUE shipper priority? If you can answer that accurately, then you’re able to provide pricing that supports the service levels they need.
Is logistics technology all that?
Of course, we are in the business of selling logistics technology, but we agree technology alone will not make you successful in this industry. Ed shared with us:
When it comes to technology, it seems like many people in transportation get excited at digital tools for the sake of the tool, not what the tool can accomplish. Big data. Blockchain. EDL. These are just words unless they are applied in ways to support the business goals of the shipper, the carrier, or both. “I need complete visibility!” people will say. Why? Just for the sake of it?
The best digital tools are the ones that are born out of business goals. One of the best examples is in high value freight – that is a transportation sector with legitimate needs for digital tools that provide visibility, many high value trailers can be locked down or have the brakes engaged from a remote location to ensure the goods aren’t stolen. That makes sense!
Providing technology that makes sense is why we focus heavily on integrating our shipping software to our customers' existing technology. Our goal is to enable them to pull system data into a single hub to achieve business goals more efficiently.
The Right Balance
From logistics resource ELD Focus, Arnold Chapman shared his thoughts on creating a balance between relationships and technology.
The perfect balance between developing great relationships and digital tools for shippers is 60% technology and 40% human. There are tasks best suited for human expertise, while there are those that can be enhanced by technology, and the rest requires both. Human expertise cannot be replaced, especially when it comes to decision making, strategic thinking, and creativity. However, technology is great for strengthening your operational functions.
We advocate digitizing processes as we witness what that can do for businesses that heavily ship freight every day. As we cover in our post Grow Your Business with TMS - More Time and Resources, many internal resources can be reallocated when you use shipping automation tools. But the fact remains that creating relationships in this industry, in particular, is vital to your success.
For more industry tips, we encourage you to check out our eBook bundle featuring guides on carrier rate shopping, digitizing logistical supply chains, tracking & reporting, and parcel & freight auditing.
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