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January 6 2020

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2020 ANNUAL REVIEW & OUTLOOK 100 The Journal of Commerce | Januar y 6 2020 Surface Transportation | In Perspective THIS YEAR, SHIPPERS will have a brief opportun- ity to make the single most meaningful change they can make for their companies, and even individually as logistics professionals. In 2019, shippers experienced a respite from their blown freight budgets — the result of a capacity crisis that began in 2017, fueled by the longest economic recovery in US history, the federal electronic logging device (ELD) mandate, food safety changes, and those new and devastating OTIF-styled delivery penalties. Times are pretty good at the moment. However, until the economy enters recession, shippers shouldn't let their guard down. The next capaci- ty event is always one weather event, a growing season, or a rail service disruption away. Amid today's temporary calm in the Sea of Capacity, here are three concrete steps to take now to set up future success for your organiza- tion — and your career advancement — and of course, some traps to avoid along the way. Step one is to make 90 percent visibility into every truckload location mandatory by the end of 2020, using GPS technology fed to you by your carriers and your brokers. Multiple com- panies help shippers and brokers aggregate GPS data on shipments, so this is well within the grasp of every US shipper who wants it. If my non-asset-based brokerage, serving hundreds of customers with their thousands of shipping points using a plethora of carriers, reached 90 percent in a year (which we did), any shipper can and should be doing the same. It takes effort to move through the progres- sion of asking your carriers and your organi- zation to get behind your company's needs. It starts with a system to handle the data, which most transportation management systems The new procurement imperative By Jeff Tucker already have, communication of your visibility goal to your providers, encouragement along the way, incentives to sweeten the deal, moving to demand successful connections, and ulti- mately cutting off providers who can't or won't get with the program. Step two is to realize that with visibility, you get the gold mine of data on your company you've been wishing for your entire career! Whether you're exposed to fines for late deliv- eries or you simply want to satisfy your custom- ers with timely deliveries, you'll get clarity for the first time in your company's history. You will no longer be dependent upon car- riers and brokers, who often grossly overstate their actual performance, to self-report on-time performance. You'll get data into your lanes, which will allow you to adjust transit times and cut and dissect lane data like a champ. All of this leads to better execution, better customer service, and better control of the work you do. Once you're connected, you can add lots of other tools, including temperature readings, humidity, security, and timely and auto- mated notifications when a shipment might be running late, so you can intervene early and manage by exception. As cameras become more prevalent — especially if chain of custody is a high priority for your business — you might soon be able to see if a broken seal was simply a door opening and closing, or if something more nefarious occurred. The possibilities are endless, but you must be connected first. Step three is to establish minimum on-time performance standards for your providers and exclude providers who don't hit these minimums during your next bid event. We were thrilled, for example, by a customer's choice to deploy a mini- bid in mid- to late-2019 in which the only incum- bent providers invited to bid were companies at or above 90 percent on-time. The customer was agnostic as to whether the providers were brokers or carriers, with contracts awarded solely based on price and ability to handle the lane. But make no mistake: Underperforming providers had no place in the process, and this kind of gutsy procurement has the potential to be revolutionary for shippers. For more than 100 years of truck freight The next capacity event is always one weather event, a growing season, or a rail service disruption away.

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