Being Loyal to Carriers Can Pay Off

According to a new Executive Briefing on Domestic Transportation from the Tompkins Supply Chain Consortium, the transportation policies of every shipper are about to be put to the test. The report’s authors believe organizations that implemented best practices during the recession can expect more modest price increases—in the mid-single digits—compared to those who continuously sent out multiple RFPs for lowest prices.

The briefing characterizes best practices as partnering with incumbent carriers and sticking with long-term providers.

“If an organization relentlessly played the spot market, conducted multiple RFPs, and constantly turned volume over to the lowest bidder, price increases in the high teens are not out of the question and capacity at any price may be di
fficult to come by during certain seasonal peaks,” the briefing states.

It concludes that establishing a regular interval for RFPs that strike a balance between keeping tabs on the market and allowing carriers enough time to efficiently develop the lane will be well received by the carriers and pay off in the long run.

“Smart carriers know that, eventually, the shoe will be back on the other foot and will ultimately reward the [customer] for being a good, long-term partner,” the authors conclude.

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