Optimize Your Carrier Partner Network to Win Higher Paying and Recurring Business
May 18, 2021 9:00:00 AM
Carriers rely on trusted partnerships to secure shippers’ freight, win contracts, and promote recurring business agreements. But to land more lucrative contracts, carriers must look to optimize and expand their partner network. An optimized partner network offers numerous advantages, allowing you to:
- Expand your service area
- Participate in intermodal bids
- Benefit from your partners’ reputations and gain access to their customer bases
In this article, we’ll go over each of these benefits, and offer some guidance on how to effectively expand your network.
Expand Your Service Area
Forming partnerships in regions where you don’t currently operate allows you to accept shipments there, expanding your service area.
PwC notes that many companies sector-wide are turning to alliances in an attempt to build collaboration and efficiency. Growing a collection of national, regional, and local carrier partnerships helps you form relationships that can generate additional recurring revenue.
There’s a misconception that only national carriers are equipped to handle large freight volumes, so smaller carriers are often overlooked as potential partners. On the surface, a national carrier’s network spans a wider area, but even if certain lanes are serviced, they may not be easily covered, and servicing those areas may incur extra costs.
By comparison, local and regional carriers are highly active on key lanes in targeted areas, providing larger carriers with greater optimization opportunities. Especially when it comes to servicing remote areas, partnering with local carriers who know the region well may allow you to fill in gaps on your service map for less.
The same applies for cross-border shipping. Partnering with carriers who are multilingual and familiar with customs requirements allows you to benefit from their regional expertise and efficiently expand your service area into other countries. This is particularly important for US carriers who are looking to expand into Mexico and Canada (the US’s largest and second-largest goods trading partners, respectively).
Each partner serves a unique role within your network. To make the most of your relationships, play to their strengths (and capacity) and you can reap the financial benefits of a wider service area.
Participate in Intermodal Bids
By diversifying your partner network via intermodal means, you’re no longer locked into one mode of transport — you have the flexibility to adapt and potentially gain more business.
Whereas your shippers and potential customers use the RFP process to discover how they can best work with intermodal services, you may participate in intermodal contract bids as a collaborative vendor for larger, more complex logistics projects. RFPs pose a valuable opportunity for network expansion given the requester is actively looking for new relationships.
Intermodal transport combats overreliance on the truckload market and protects against low available capacity. Experts speculate truckload demand is unlikely to ease for the foreseeable future. In fact, a historically tight capacity compounded by environmental factors like the recent driver shortages makes servicing demand a challenge.
Intermodal partnerships are particularly helpful as supply chain disruptions invariably arise. Consider cross-border shipping between the US, Canada, and Mexico which often results in unintended delays. When your shippers opt for intermodal transport, their shipments are more likely to clear faster due to streamlined customs, tax, and compliance processes. The efficiency of intermodal optimizes shipment transit overall, allowing the whole supply chain to win.
Benefit from Peer Brand Reputation
The logistics industry is largely built on trust and established relationships, and working with other trusted carriers can help bolster your own brand’s reputation.
Strategic partnerships give access to your partners’ customer bases, and you get some of their trust by association; you’re not just building relationships with your carrier partners, you’re also building relationships with their customers.
It’s a matter of strategically selecting the right partners to work with, preferably those who demonstrate a strong track record and are well-respected by shippers. A successful carrier partnership asserts credibility to prospective customers and strengthens service delivery.
Challenges of Expanding Your Carrier Network
Working with carrier partners has many benefits, but it can also create more time-consuming and labor-intensive work for your in-house team, such as:
Processing contracts and insurance information
Optimizing communications between partners via APIs, EDI, etc.
Inputting carrier info like SCAC codes, global carrier codes, rates, etc.
Processing freight bills from multiple partners
Many of DDC’s clients have optimized networks that enable them to deliver first-class transportation and logistics services to their shippers. Our freight billing and LTL industry experts are well versed in the business of logistics carrier management and how those relationships impact back office operations. DDC FPO helps relieve these administrative burdens for our carrier and 3PL clients, so their in-house teams can focus on nurturing partnerships and winning more contracts.
The benefits of optimizing and expanding your carrier partner network are significant.
By doing so, you can enter unserviced regions to widen your service area and revenue streams, and further diversifying your network via intermodal bids can create the flexibility to win more work, all without a commitment to a single mode of transport. Strategic partnerships with trusted carriers also allow you to enhance your brand’s reputation and recurring business.
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