5 Performance Indicators You Should Consider with Your Long-Term Logistics Provider

Don't keep dating a turkey...

Let’s take a walk down memory lane.  Remember your search for “the one?” The courtship, the evaluation process, the long sleepless nights, the bidding wars…  Remember making that call to say, “I pick you!”  I’m talking about choosing a forwarder, of course!   Think back to that time.

Now consider, what selection criteria did you use?  What swayed your decision?  Was it all about price?  Service?  Technology?  Big name reputation?  Quality reputation?  Did you flip a coin?  While performing your evaluation, prospective providers probably rolled out the red carpet, wined and dined you, and convinced you just how much value they could bring to your business.  While it may sound like I’m about to launch into a really brilliant Shapiro sales pitch, that’s really not my goal here, honest!

I’m just here to talk about getting the most out of this chosen relationship.  There are certain elements you should rightfully expect from your vendor of choice.  When you consider the services you source from this forwarder, are you getting your money’s worth?

  1. Set-up:  Did your vendor come to the table with questions that allowed you to really introduce yourself and your needs?  Were you promised and given a standard operating procedure (SOP)?  This SOP should have been generated with your supply chain and processes in mind.  This doesn’t need to be a long, cumbersome document; it can be very basic if your needs are simple.  It shouldn’t be a one-sided document either, so speak up!  Now is your chance!  When creating the SOP, don’t be shy about outlining exactly what you expect from your forwarder.  And, remember, this is a living document.  What works for your supply chain today may not work 6 months from now.  This document is only meaningful if it’s designed with thought, managed with care, and kept current with diligence.
  2. Service:  When it comes to customer service, some of you like a lot of hand-holding.  Others prefer to let things run on their own, only calling up when there’s an issue.  Some people want daily emails, and some only want to hear from their forwarder if a container falls overboard (yes, this actually happens, folks).  Does your vendor know which type you are, and are they honoring that?  Do they live by a mantra of delivering outstanding service, no matter what?  Or have they started to lose interest?  Maybe not the moment they brought your account through the door, but perhaps after a few months or years?   In a highly competitive industry, service is the great differentiator, so it’s okay to have high expectations.  Make those expectations known, and don’t be shy if your vendor isn’t living up to them.
  3. Technology: Doing more with less is nothing new.  Technology enables us all to achieve that.  Is your vendor bringing technology to the relationship that either complements your own or compensates for it?  Do you know about their system’s features and how you might be able to use those tools?  These technology platforms can be as simple as track and trace or as complex as a fully integrated Transportation Management System (TMS).  It’s not about having a bunch of unnecessary bells and whistles.  It’s about having technology to meet your needs and make your job easier.  Forwarders are putting more of an emphasis on technology now than ever before; order management, warehouse management integration, carrier allocation planning, reports, and dashboards galore!  Make sure you know all that your partner has to offer.
  4. Price:  Remember the old adage, “You get what you pay for.”  So, ARE you getting what you pay for?  And is that enough?  If not, did you chase after the lowest price, foregoing service and technology?  Did you consider value added services (such as custom reporting, dashboards, and high quality customer service) when evaluating “cost” or did you just look at the bottom line?  I get it, money talks.  Choosing the least expensive sometimes makes sense.  However, if you know the needs of your supply chain will require more out of your vendor, take that into consideration and splurge a little.  Go for value over cheap whenever possible!  You might find you save more in the long run.
  5. Special sauce:  Some forwarders have it, others don’t.  Does yours go above and beyond to keep you informed of changes that would affect your supply chain?  Are they notifying you of labor unrest, weather delays, or market changes that could throw off your smooth-running engine room?  Do they have a clever blog on a cool website with a quirky feel?  (Sorry, I couldn’t resist there!)  Your forwarder should welcome suggestions for better ways of communicating.   They should bring knowledge and expertise as well as critical thinking and creative solutions to every problem solving matter.  And they should always have your best interests in mind.

So, has your relationship with your forwarder lost its spark?  Has their fire to give you great customer service simmered out?  Do you need more than they are able to give you?  Don’t worry, the right company is out there for you.  And if this blog has stirred a bit of curiosity in your vendor performance, feel free to quench it by reading our whitepaper on The Essential Guide to Implementing Vendor Performance Metrics.  We have faith that with just a little time and effort, you too can find that perfect match.

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-- Angela Czajkowski
Director, Supply Chain