A Carrier Procurement Strategy Guide for Service, Cost, and Sustainability

Before sending out requests for information (RFIs), it's essential to have a comprehensive carrier procurement strategy that aligns with your service, cost, and sustainability goals. Contrary to popular belief, you don't have to compromise one network priority for another. With the right approach, you can achieve a balance that satisfies both your C-suite and operation leaders.

To execute a carrier procurement strategy that aligns with multiple objectives effectively, it's essential to create a plan that considers market dynamics, carrier capabilities, and your organization's specific operational needs. Achieving a balance among these elements not only mitigates potential trade-offs but also enhances competitive advantage. Data plays a fundamental role in this strategy, empowering informed decision-making and optimizing transportation network performance.

The importance of strategic alignment

Many procurement leaders possess vast amounts of data, but without proper organization, it becomes difficult to make informed decisions. This is critical because the results of your request for proposal (RFP) are significant to your overarching business goals. By effectively organizing and utilizing data, procurement leaders can better navigate these complexities and drive successful outcomes for their organizations.

Start by setting a goal

To develop a successful carrier procurement strategy, start by setting clear and achievable goals that align with your company's logistics objectives. Assess your transportation network priorities, such as service, cost, and sustainability, and consider additional factors such as resilience to market fluctuations and the ability to adapt to unexpected disruptions. This is especially crucial with a market shift expected in 2025.

In this strategy, it's crucial to determine which carriers you wish to continue partnering with. Reward incumbent carriers that consistently meet your expectations and remain competitive in the industry. If selecting a new carrier, carefully consider whether it will be asset-based or non-asset-based and the tradeoffs involved. Asset-based carriers offer greater control and reliability, while non-asset-based carriers provide flexibility and cost savings in today’s market. This decision becomes even more crucial in light of rising cargo theft incidents, which necessitate a focus on security measures and risk management strategies.

To enhance your operations, adopt a data-driven approach by setting metrics for performance evaluation like on-time delivery rates, safety records, and reliability scores. Continuously review and adjust your strategy to keep it effective and aligned with your evolving business needs.

Balance cost, service, and sustainability needs

Navigating the complexities of balancing cost, service, and sustainability when selecting carriers can be challenging. To master this balance, consider examining lanes with alternative energy or fuel availability and infrastructure. For these lanes, encourage carriers to bid on both alternative energy and traditional diesel fuel options. During the RFP process, you can also request carriers' SmartWay scores and inquire about their current or planned initiatives to reduce emissions. This approach streamlines the decision-making process by providing insight into their sustainability efforts, which can then be evaluated alongside their linehaul rates and service metrics. By integrating sustainability into carrier procurement, you hold carriers accountable for their carbon footprint and support your transportation emissions reduction goals.

Foster strong partner relationships

Building meaningful carrier relationships hinges on transparency, transforming carrier procurement from a mere transaction into a partnership. By treating carriers as key stakeholders in your transportation network, you can enhance service levels while unlocking cost savings and sustainability opportunities through collaboration. Shippers who neglect to nurture these relationships will be the most vulnerable during disruptions.

Regular check-ins and performance reviews with carriers can help in addressing concerns proactively and contribute to continuous improvement efforts. Furthermore, leveraging technology to support conversations with data-driven insights can boost responsiveness to dynamic market conditions. In doing so, companies can create a resilient transportation network that is both agile and aligned with long-term business objectives.

Post-RFP actions are crucial

The actions you take after finalizing your RFP are key to realizing your goals. Pair your RFP with compliance monitoring tools, like Capac-ID, to implement the results effectively. Capac-ID is a powerful tool that compares your linehaul rates to industry benchmarks, identifies best-fit carriers for specific lanes within your network, and provides ongoing, actionable recommendations to ensure your network remains strong. This tool can also help you proactively address deviations by comparing your network performance to plan. It provides strategic guidance through market disruptions, ensuring your transportation network aligns seamlessly with your broader business goals.

To explore how Materne North America leverages Capac-ID within their transportation network, read their success story or watch the video below.

Optimize carrier procurement for operational excellence and sustainability

A successful carrier procurement strategy requires a comprehensive approach that balances service, cost, and sustainability objectives. By setting clear goals, fostering strong partner relationships, and leveraging data-driven insights, organizations can optimize their transportation networks for both short-term and long-term success. Embracing cutting-edge technology like Capac-ID can also enhance the performance of your carrier procurement strategy by providing actionable metrics and recommendations for continuous improvement.

With this holistic approach, organizations can effectively navigate market dynamics while aligning their transportation networks with their overall business objectives. So don't just settle for any carrier - develop a strategic approach that sets your company apart from the competition and achieves both operational excellence and sustainability.

For those seeking expert guidance on refining their carrier procurement strategies, Breakthrough is here to help. Our team of transportation experts offers comprehensive RFP services tailored to meet your unique needs. Contact us today to learn more about how we can support your business goals!