A guide to evaluate new transporters or carriers26 April, 2017
Logistics managers today often are confronted with a situation of choosing new carriers. Whatever are the reasons for addition, good decisions are typically based on reasonable ground-work using what I would call as the essentials for choosing. Following are a set of useful/ essential parameters perhaps can be used to create a weighted criterion based matrix and arrive at a carrier of choice.
What are your load volumes and often traversed destinations? Most logistics managers would carry these numbers. But what is important is note is how current is the data and how much of it provides an ‘anticipated’ plan for future. Broadly a high level load plan can weed out carriers on either side of the spectrum – meaning they are too small or a bit too big!
What is the strength of carrier’s fleet? Is the carrier a demand aggregator or do they own their fleet? How much of capacity can be spared towards your operations. Capacity could also include the space availability at trans-shipment points, number of personnel in the operations team by branch etc.
Where are the carrier’s primary service locations? Service locations typically could entail a transshipment warehouse, a local liaison office to provide fleet maintenance support services, customer support services and vendor management.
How does the carrier measure the efficacy of his operations? Check on simple measures like on-time pick-ups and deliveries, missed pick-ups, vehicle uptime or driver performance parameters.
Evaluate the ease of working with each carrier’s service or operations personnel Are they knowledgeable about your account? Do they express concern for your needs?
Know the carrier’s price: Price often being one of the more significant reasons for picking carriers, an understanding of all factors affecting the net transportation cost is vital. When reviewing each carrier’s pricing, compare key factors such as tariff base rate, discounts, diesel escalation percentages/ formulas, loading, unloading charges or similar accessorial charges etc.
How mature is carrier’s technology landscape: Can the carrier provide you with freights bills on time? Are all the trans-shipments points connected for online updates with respect to shipments passing through? Can the carrier provide you with detailed status and real-time status update on any pick? These are some of the questions logistics managers can seek answers to.
It is important to note that much of the parameters listed above are necessarily not in any order of priority. It is only to serve as a guide when evaluating new carriers. There could be more factors coming in play with specifics.