Third party capacity providers are not asset based motor carriers nor should we pretend to be. We do not have economies of scale that through volume purchasing allow us to acquire a truck or a trailer or a tire at a discount. In fact, the majority of the independent truckers who we work with do not have economies of scale either.
So then why seek to be prized by our customers in the same way that large asset-based fleets are prized – often by providing competitive pricing in exchange for consistent business? We cannot. The strategy in partnership should be to deliver value to our customers specifically because we are not asset-based rather than by pretending to be somebody who we are not. The prize then, is that like a mechanic, we maintain and repair moving parts of your transportation machine: we don’t drive the machine, we fix it.
This maintenance and repair comes in many forms – our response time has to be faster to short notice needs; our ability to swell has to be much greater; we need to be able to add lanes and assist on lanes with almost zero lead time; we need to cover peak season surges; we need to provide business continuity on high volume lanes; we need to keep raw materials moving 100% of the time so that manufacturing lines never go down; we respond to weather disasters. These movements account for only about 10% of a shipper’s annual volume, but they are overwhelmingly the majority of the most critical shipments in the network and take up 90% of the operator’s attention; it is when the machine starts falling apart that we repair it.
To be certain 90% of a shipper’s volume should move like the proverbial well-oiled machine: a bid process, an award to several carriers per lane, a routing guide, tenders, acceptance, on-time service. There are many ways of strategically designing the logistics partnership to be different than that – to be what it is not. Some customers place us 3rd or 4th on the routing guide so that we are already plugged in when the regular carriers cannot cover shipments (routine maintenance). Some clients call on us for 30-45 days at a time to cover network changes until they can get an established carrier in place (breakdown repair). Some customers hold asset-based RFC’s only, then hold separate non-asset based RFC’s after they have identified capacity gaps. Some customers do all of the above and much more. Whatever your individual needs are, identify them preventively with a qualified broker – like Surge Transportation – and build a service continuity plan. Face your freight year prepared for the ordinary and the extra-ordinary. But no matter what you do, don’t take your routing guide on a 12 month road trip without knowing a good mechanic or two.