As a shipper, you want to use the trucking carriers that provide your company the best overall value. We talked with over 100 shippers, and after price, the leading metrics used in their carrier selection process are quality and safety. Our follow up question was then, “How do they measure quality and safety?” At this point, the answers were fairly surprising. Most shippers pointed to the FMCSA as their sole source for determining quality and safety. While the FMCSA’s Safety Measurement System (SMS) provides a great starting point for assessing the safety of trucking carriers, it begs the question, “Is FMCSA data enough to evaluate carriers?” The answer is a resounding NO…
To ensure you are consistently choosing the right trucking company for your shipping needs, you must construct a holistic view of your supplier, requiring significantly more data and deeper analysis than the FMCSA provides.
Lets Take A Look at the FMCSA…
The FMCSA was established in 2000 as a separate administration within the U.S. Department of Transportation “to reduce crashes, injuries, and fatalities involving large trucks and buses.” Using the FMCSA’s data, shippers can begin to assess the safety risks associated with certain trucking suppliers. But, shippers can’t decide which trucking vendors to use based on FMCSA data alone. In fact, if you consider the FMCSA’s aforementioned mission, they are singularly focused on safety, which is only a component of measuring a carriers overall value.
So What’s a Shipper to Do?
Shippers need to qualify truck carriers on a host of factors to find the ones with the best overall value. This is only possible by holistically examining your carriers. The following list examines some other factors to consider when building a holistic view:
Phase I – These are the metrics shippers should look at first to determine if a trucking vendor is even capable of doing the job required.
Capabilities – First, shippers must ask themselves what type of equipment they need for their job. Also, does the vendor have the experience and knowhow to get the job done right?
Lanes – Once you’ve established that the carrier has the capabilities to complete your job, the next question is if they perform the job in the lane you need?
Schedule – Does the trucking carrier have the equipment you need available when you need it, and can they perform the job in your timeframe?
Pricing – Shippers must ask themselves if the trucking vendors they are considering are an economical option. If a shipper based every decision solely on price, there’s a high likelihood they would end up paying more in the long run. That being said, price is still an important factor to consider when vetting your trucking vendors.
Phase II – This information helps shippers decide which trucking companies can do the job reliably.
Safety – This is where the FMCSA data can come into play for shippers to evaluate their potential carriers. Obviously, shippers want to ensure the trucking vendors they use are safe on the road as well as minimize damage to the goods they’re transporting. Employee training, driver and vehicle inspections, and crash history all go into determining the safety of your potential carriers.
Financials – Understanding your carrier’s financials is paramount to deciding if they are a viable solution for your trucking needs. In addition to obtaining a credit profile, shippers need to understand how their business fits into their trucking vendor’s business. For example, are you accounting for an unsustainable percentage of your carrier’s business?
Insurance – Shippers also need to evaluate the types of insurance their trucking vendors carry and in what amounts. This can help shippers better analyze the risks and potential liabilities associated with using different truckers.
Recommendations – Both internal and external recommendations can be crucial when deciding which carriers to use. Maybe someone on your team has a deep relationship with a particular vendor and can provide insights based on their personal experience.
Phase III – These metrics help provide shippers with a holistic view of their trucking vendors, helping them choose the carrier providing the best overall value.
Technological Capabilities – What technologies do your truckers employ to help get the job done right, on-time, and give you visibility? Do they offer GPS monitoring of loads or have EDI capabilities? What Transportation Management System do they utilize? Looking at these factors can help shippers determine the carrier they are most comfortable using for their needs.
Environmental – Many organizations have adopted corporate responsibility guidelines around environmental stewardship. Does the carrier’s environmental stance align with that of your company? Furthermore, environmental incidents can indicate larger issues exist with the carrier with regard to risk management.
Customer Service – Shippers need to feel comfortable working with their carriers and going to them when any potential issues arise. The trucking vendors providing the highest value will be responsive to your questions and needs, helping you complete every job.
Clearly a lot of information goes into building a holistic view of your carriers and determining which provides the best overall value. While FMCSA data is a great resource for safety information, shippers need to analyze a host of other factors to be confident in their carrier selection.