TORONTO, Ont. - Quality shippers can be a tough nut to crack. Often, the best shippers work with a handful of carriers that have served them long-term and developed an intimate understanding of their ...
TORONTO, Ont. – Quality shippers can be a tough nut to crack. Often, the best shippers work with a handful of carriers that have served them long-term and developed an intimate understanding of their needs. Carriers work hard to serve those top tier shippers and to maintain the business.
But there are steps a fleet can take to better its chances of getting a piece of a preferred shipper’s business. Neil McKenna, vice-president of transportation for Canadian Tire and Allan Kelly, director of logistics with food company Casco, were at a recent Let’s Talk seminar on profitability hosted by Markel Insurance, to offer insight into what shippers expect from their carriers.
Canadian Tire works with 20-30 carriers as well as its own private fleet.
“It is difficult to crack Canadian Tire’s supply chain as a regular carrier,” admitted McKenna. “They’ve (regular carriers) been with us a long time. They know our business and they keep our business.”
Casco relies on a select group of core carriers for 75-80% of its bulk requirements while drawing from a wider pool for its van moves.
In these trying times for the trucking industry, both McKenna and Kelly acknowledge it’s a buyer’s market.
“We don’t see any issues at all in getting van carriers,” said Kelly. “We’re getting calls every day from companies we’ve never heard of before.”
McKenna agreed that there’s excess capacity in Central Canada, but a driver shortage continues to constrain capacity in the west. The excess capacity that exists in much of Canada makes it difficult for carriers to ask for rate increases. McKenna said his company is paying rate increases of 0-3% this year.
However, despite the unfavourable economic conditions facing trucking companies today, there are still opportunities.
Kelly said the railroads are beginning to price themselves out of some of the north-south lanes that they once controlled. Casco recently moved its London to Chicago lane off the rails and onto truck. Railway rate increases have made the cost advantages of using rail negligible, Kelly said, adding “equipment is more predictable and on-time delivery is more predictable” with truck.
He said he encourages other shippers who use short-line railways to revisit their modal selection. But while price is one factor in choosing modes and transportation providers, both Kelly and McKenna agree they have no interest in contributing to a carrier’s demise by asking them to haul their freight for free.
“We don’t want our carriers to disappear,” said Kelly. “If they present us with facts and figures of what they need, we’re going to listen.”
“The opportunity to buy freight at less than cost is there, but it’s not necessarily healthy,” added McKenna.
Both shippers agree they’re willing to pay accessorial charges – when warranted.
“We know everybody has to make a nickel, but not necessarily a dime,” said McKenna.
If you do manage to get past the front door with a preferred shipper, there are steps a salesperson can take to better your chances of securing some business, the shippers advise. For one, don’t try to pull the wool over their eyes.
“We know the cost to move our freight,” said McKenna. “We know the cost of equipment, fuel and labour.”
Kelly said the first step for prospective new carriers is to demonstrate an understanding of his company’s requirements.
“Do research,” he suggested. “Often, they don’t have the details of our product’s handling characteristics. Get on the Web site and know what our products are for a starting point.”
He said his company is “looking for more sophistication” from its carriers.
He suggested showing up at a meeting with statistics highlighting important figures such as on-time delivery percentages and lead-time requirements.
“We can take that information and try to influence some change,” he said.
Kelly also prefers working with carriers that keep him appraised of what’s going on in the trucking industry.
Once you do get a chance to haul their freight, it’s important to live up to expectations and present a professional image.
McKenna said how a fleet’s drivers present themselves can go a long way towards determining if they will earn more – or less – of Canadian Tire’s business.
“We expect them to be pleasant, to be decked out in good apparel, to be wearing safety shoes and to get along with the people they’re dealing with at the end of the load,” he said.
In Casco’s case, carriers must maintain product integrity along the supply chain which means drivers must be trained on how to handle the product. Both shippers conduct regular meetings with their carriers to address any issues that come up and both stressed the growing importance of developing strong carrier/shipper relations.
Communication is key, noted McKenna.
“I don’t get a complaint when the freight is not there. They complain because they didn’t know it wasn’t coming,” he explained, adding the ability to track freight is increasingly important.
Casco is in the process of possibly dismissing one of its carriers for a number of reasons, including improperly completed paperwork, poor communication and poor interaction with the customer.
“This carrier should not be surprised,” Kelly pointed out.