You oversee the freight moving to and from your company’s door. In doing so, you’re tasked with meeting certain deadlines, budgetary benchmarks and performance goals. As a logistics manager, achieving these ends is essential for the success of your business. But it’s not always easy to do so.
Managing a transportation supply chain — and ensuring its optimization — is no small task; well-oiled systems take focused effort and coordination between multiple parties.
Transportation companies — the third-party providers you use to move cargo from A to B — are an essential part of this machine. Although the number of transportation providers you use will depend on a range of factors, most companies have a network of them, each serving a specific role in their supply chain.
Since the transportation industry is so fragmented, however, there are hundreds of thousands of companies within it. It’s your job to choose a network of providers from this field, know when it's time to cut underperformers loose and continuously strive for a well-optimized, dependable network. Your supply chain and customers deserve nothing less.
That said, it’s not unusual for logistics professionals to feel uneasy at the prospect of onboarding a new carrier — especially in the middle of a business cycle. Doing so feels like an unnecessary hassle, like it’ll be easier to fix what’s broken with a current carrier than to restart with a brand new company.
With so much on the line for your business and customers, you might actively avoid bringing on a new carrier to simply save your efforts for something more pressing. In the end, though, this is doing your supply chain a disservice — there are too many great providers out there to let avoidance or inconvenience compromise your standards.
Here at Anderson Trucking Service (ATS), our four operating divisions work with thousands of shippers globally. Over the years (since 1955) our teams have seen the negative impact a single poor transportation provider can have on an entire supply chain. This isn’t a place you want to find yourself.
This article will break down six steps for onboarding a new transportation provider. With a sound process in place, you’ll have no trouble adding new carriers to your network, ensuring the ongoing success of your transportation processes for decades to come.
The six most important steps for onboarding a new carrier are:
- Conduct a thorough vetting process
- Decide where they fit within your network
- Establish clear communication channels
- Set performance expectations and KPI benchmarks
- Provide support
- Monitor carrier performance and follow up
1. Conduct a Thorough Vetting Process
The first, and perhaps most important, step for onboarding a new provider is to ensure they’re right for you. You don’t have time to onboard and learn a new transportation provider every other month. Ideally, every provider you work into your supply chain will stay there for a prolonged period.
Before you do anything else, make sure to conduct a thorough vetting process. Keep it basic initially. But, this means doing more than analyzing a transportation company for a single metric — like pricing — alone. Instead, do your research and ask each company the questions that matter.
Although there’s a laundry list of queries you should ask (here is a checklist with 30 of them), some of the most helpful are:
- What experience do you have moving my kind of freight?
- How long have you been in business?
- What steps do you take to ensure on-time deliveries?
- What kind of resources do you have in-house that would benefit my company?
- Are you comfortable providing regular capacity along my lanes?
- What kind of load-tracking systems and customer-accessible technologies do you have in place?
- What kind of trailer configurations do you have available?
Each transportation company will answer these questions differently. Look for a provider that instills confidence in you and has an extended history of servicing your lane(s).
Additionally, your vetting process should include individual research. Check up on each provider’s accident history and Department of Transportation (DOT) safety rating — “unsatisfactory” and “conditional” ratings should be avoided. Carrier 411 is a good place to start this research.
Finally, don’t be afraid to ask each provider for references, hearing from other businesses that have used them in the past will help you gauge how well they will fit your needs.
2. Decide Where They Fit Within Your Network
Once you’ve finished vetting a transportation company, and are confident in its ability to meet your needs long-term, it’s time to place it within your network.
Pinpointing a new provider’s role shouldn’t be difficult; at this point, you should have a good idea of this company’s strengths. Making this discernment typically takes two conversations:
- An initial conversation with the new carrier where you gauge what they’d like to see volume/lane-wise per period and what they’re comfortable committing to.
- An internal conversation with various stakeholders where you look at your current network of providers and their individual capabilities and map out a plan for covering your outbound freight volumes that incorporates this new provider.
With these conversations to lean on, your new carrier’s role should be (relatively) clear. That said, before making any extended commitments, it’s best to “test” your new addition for a time. In that way, you’ll receive a better understanding of what working with them will be like, allowing you to make adjustments accordingly.
3. Establish Clear Communication Channels
Miscommunication is the enemy of every transportation supply chain. Too many things can go wrong when wires get crossed; shoddy communication jeopardizes on-time pickups, on-time deliveries and budgetary adherence (to name a few).
For this reason, be sure to establish clear lines of communication between parties when onboarding a new provider. Ask your point of contact how they prefer to be contacted and — whether it's over the phone, via email or using an online portal — take note of this. Additionally, don’t forget to ask them about their after-hours support and procedures in case you need to contact them on a weekend or in the evening.
Encourage electronic tracking of trucks. This is easily attainable in today's market via several platforms. This will give you immediate real-time awareness of the position of your loads, which increases accuracy and virtually eliminates phone calls to those driving.
At the end of the day, the more transparency you can develop here the better.
The last thing you need is a load to fail or show up late because you weren’t sure about how to get into contact with your provider. And, even though great transportation companies are on top of their game in this regard, take the initiative to establish communication expectations and channels as soon as you onboard them.
4. Set Expectations and KPI Benchmarks
In the initial stages of your transportation provider onboarding process — after you’ve pinpointed their fit and established communication procedures — you’ll want to schedule a call/meeting with your point of contact to discuss expectations and key performance indicators (KPIs). Transportation providers, trucking companies and drivers want to know “the rules of the game” prior to handling their first load.
It’s important to have these understandings in place; no company can live up to expectations it's unaware of. As such, for the ongoing health of this relationship and your supply chain, communicate which KPIs you’ll be measuring and what level of performance your new provider will be held to.
Every great transportation provider is used to meeting a set of KPIs with each customer. That said, every shipper has different KPI and performance expectations.
Meet with your provider and tell them what you expect when it comes to:
- On-time pickup rate (per period)
- On-time delivery rate (per period)
- Tender acceptance rate (per period)
- Percentage of asset vs. brokered coverage (where applicable)
- Load tracking percentages (where applicable)
- Time to respond to opportunities
- Whatever else is important to your business
It’s also imperative to outline how your new provider will be informed of their performance. Will it be through an online system or a shared spreadsheet? Should they expect regular check-ins to discuss successes and shortcomings?
Be sure you and your provider walk away from this conversation with clear KPIs and a system for tracking them in place.
5. Provide Support
New transportation providers may need some support to get up to speed on your processes and procedures. Every company handles its supply chain differently, including yours.
Getting a new transportation provider comfortable interacting with your business — and its specific processes — will take time. That said, establishing meetings, where your point of contact (and their support team) can ask questions, will help them round this learning curve faster.
Some companies even offer electronic onboarding packets complete with everything from an overview of the expectations and KPIs in place to instructions for inbound trucks and communication preferences.
The more you can do to help your new provider learn about your business, the better. Your approach to doing so may differ from others, however, it’s important to provide some form of training.
6. Monitor Carrier Performance and Follow Up
With communication channels in place, KPIs established, expectations communicated and a relationship developing, it’s time to plug your new transportation provider into the role you’ve carved out for it.
Start tendering them freight conservatively, giving them opportunities to meet your demands and display their service proficiencies. Keep a close eye on their performance each week/month/quarter to ensure they’re hitting the benchmarks you’ve set.
After a time, follow up with your point of contact to discuss where adjustments can be made going forward. Optimizing with a new provider is an ongoing process. That said, eventually — with the right feedback from you and commitment from them — a well-vetted carrier should become a seamless extension of your supply chain.
Continue to monitor them as you do every carrier and hold them to the commitments they’ve made because the health of your customer relationships depends on it.
How Many Transportation Providers Do You Need?
Onboarding a new carrier can be an intimidating prospect. There’s a lot at stake here, your time is valuable and your customers are waiting. That’s why it’s so important to get this right.
Luckily, this process doesn’t need to be terribly difficult. Instead, follow these six steps:
- Conduct a thorough vetting process
- Decide where they fit within your network
- Establish clear communication channels
- Set performance expectations and KPI benchmarks
- Provide support
- Monitor carrier performance and follow up
Rinse and repeat.
As long as you develop a sound and efficient onboarding process, handling this will only get easier with practice.
But how many transportation providers should you actually have? Should you be onboarding new ones more regularly?
These are important questions to answer. To help you do so — and ensure your network is as robust as necessary — read this article, “How Many Transportation Providers Should You Have (and how to choose)” which breaks down the main considerations required to make this discernment.
Finally, if you have any questions about onboarding ATS’ specialized open-deck, dry van, international and/or logistics divisions, contact us here. We’re excited to help you become the supplier that always delivers for its customers.
