Are you due for a freight review?

If you’re anything like the majority of freight buyers, you probably tendered your freight contracts on the basis of your business’ situation at the time of tendering. So how long since your company looked over your freight needs? I mean, really looked over. Not just meeting with the current provider to shake hands on the yearly price update.
 
Well, there are a few signs that a freight service review may be due. Apart from the obvious reason – that you haven’t done a review in a long time – there are a few major reasons to:
 
Operational changes within your company
No business is static and there are a lot of factors that may potentially impact your freight contracts and your carrier’s ability to perform up to the standards of what you have agreed. This can include, but is not limited to, any of the following:

  • A significant growth in your business
  • New products or services
  • New market introductions
  • Change in shipped volumes or product mixes

 
Any one of these is a grounds for reevaluating your freight needs, but a combination is almost certain to mean that your current carrier(s) aren’t optimized to your needs.
 
Changes in carrier practice or performance
As a customer, it can be hard to identify specific operational changes at the carrier. There are however a few signs that can be identified in day to day business that might signal a need for a closer examination:

  • Sudden rate increases
  • Declining service levels
  • Changes in rate structure
  • Reduction in capacity
  • Carrier merger or acquisitions
  • Increasing sub-contracting of shipments to third parties
  • Communications being made more difficult
  • New/added freight services (especially important in e-commerce)
 

While specifically the first two may seem obvious, any, or several, of these signs may indicate that your current carrier setup is no longer optimal.
 
 
Changes like these are often slow and impacts might not necessarily be obvious at a glance. But in the end, you don’t want to get stuck conducting your business in a way that’s optimized to a situation that hasn’t been a reality for a long time. So be sure to keep your eyes open – there is a lot to be gained from keeping up with a volatile market place!

About the author

Jacob Wiklund is working for TenderEasy as a Sourcing Analyst / Consultant with previous experience as a consultant in supply chain management. He holds an MsC from Chalmers University of Technology. Connect with Jacob on LinkedIn. 

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