Choosing a Carrier Management Service
by Jaidyn Farar
When it comes to carriers, ecommerce merchants are spoiled for choice. In addition to the big names we all know—USPS, UPS, FedEx, and DHL—shippers can choose from hundreds of regional and local parcel carriers. Not to mention truckload and LTL carriers for transporting freight.
That’s a good thing! But it can also make your job more difficult. It takes time and effort to choose carriers, build relationships, negotiate rates, and assess performance. As you add more carriers to the mix, things get even more hectic.
That’s where carrier management comes in. With an effective carrier management strategy (not to mention a great carrier management system), you’ll build strong relationships with carriers while also getting the best deals.
What is carrier management?
Carrier management is the strategic process of choosing shipping carriers, cultivating mutually beneficial relationships, negotiating contracts, monitoring performance, and resolving any issues. The main goal of carrier management is to ensure that your packages are transported efficiently and cost-effectively. This is accomplished by creating a network of reliable carriers and assigning shipments based on each carrier’s capacity, specialization, and reliability.
What is a carrier management system?
A carrier management system is software that allows businesses to more easily communicate and collaborate with shipping carriers. This technology often includes analytics features that provide greater supply chain visibility, giving businesses real-time insight into carrier performance. Carrier management features often come as part of a transportation management system (TMS) or shipping software.
Carrier management software can help with the following:
- Monitoring carrier performance
- Developing a multi-carrier shipping strategy
- Automatically finding optimal shipping methods
- Creating shipping labels and other necessary documentation
Core components of carrier management
Carrier management’s core components are carrier selection, negotiation and contract management, performance monitoring, relationship management, and ensuring compliance. This section will take a closer look at each element.
Carrier selection
Carrier selection is just what it sounds like: choosing carriers that meet your shipping requirements. The first step is to consider your transportation needs. How many packages do you ship per month? Which geographic areas do you send them to? Do you have specialized delivery requirements, such as temperature-controlled transportation?
Once you’ve identified needs, it’s time to take a closer look at various carriers’ capabilities. Research the following factors:
- Cost. What is the carrier's pricing structure, including additional fees and surcharges?
- Capacity. Does the carrier have the capacity to handle your peak shipping volumes and scale with your business as it grows?
- Reliability. What is the carrier’s track record for on-time deliveries? How do they handle delays or disruptions in service?
- Areas served. Does the carrier offer coverage in all the regions and countries you need to ship to?
- Customer support. How responsive and helpful is the carrier's customer support team?
Negotiation and contract management
The purpose of negotiation and contract management is to establish mutually beneficial terms between your business and the carrier. Before entering into negotiations, define your expectations, including goals and requirements. This can include identifying specific metrics that are important to your operations, such as on-time delivery rate.
Negotiations should cover pricing structures, including potential discounts and volume commitments, and outline extra services like tracking and reporting. Make sure your contract includes comprehensive details like service level agreements (SLAs), price and payment terms, dispute resolution processes, and termination clauses.
Performance monitoring
To make sure carriers comply with the terms laid out in contracts, businesses must monitor their performance closely. (Data analytics tools like EasyPost Analytics help with this.) The following metrics will reveal what’s going well and where carriers need to improve.
- Transit time
- On-time delivery rate
- Damage rate
- Billing accuracy
- Claims ratio
- Customer satisfaction
If you see a lapse in performance, address it with the carrier at your next meeting or quarterly business review. Bring your data as evidence of the issue, and discuss how the carrier can improve.
Relationship management
Maintaining positive relationships with carriers helps facilitate smoother negotiations and improve performance discussions. Businesses should communicate regularly with carriers to make sure both parties are aligned on expectations.
Having a good relationship doesn’t mean keeping quiet about issues. Instead, address issues quickly and directly, working with your carrier representative to get to the root of the problem. Additionally, remember to recognize and reward carriers when they do well. This can motivate carriers to maintain high service levels, ultimately benefiting your operations and fostering a collaborative partnership.
Compliance
Monitoring carrier compliance will help protect your business. This involves making sure that carriers meet all legal and regulatory requirements. For example, you’ll need to verify that carriers hold the necessary licenses, permits, certifications, and insurance coverage required by regulatory authorities.
Benefits of implementing carrier management software
Carrier management can be done without software … so why should businesses invest in technology? The benefits of carrier management software include better visibility, more streamlined operations, and lower costs.
- Better visibility. Carrier management technology provides businesses with real-time data on carrier performance, including on-time delivery and damage rates. This allows businesses to anticipate and resolve issues in the long and short term, leading to a better customer experience.
- Streamlined operations. Manually integrating with carriers can take months of effort, making it difficult to work with multiple partners. Automating the process not only paves the way for multi-carrier shipping but also speeds up the shipping method selection process.
- Lower costs. Carrier management systems optimize costs by automatically finding the best shipping method for every package. They can also provide access to discounted rates for businesses that haven’t negotiated their own carrier contracts.
Choosing the right carrier management services
Looking for a carrier management service? Consider the following factors to decide if a specific carrier management service is the best fit for you.
- Features. Look for a service that offers features aligned with your business needs, such as real-time tracking, performance analytics, and integration with your existing systems.
- Scalability. The right carrier management service should be able to grow with your business, providing flexibility to handle increased shipping volumes or expanding service requirements.
- Support. Implementing new technology is a huge endeavor! Your carrier management system provider should lighten the load by offering prompt, personalized support during and after implementation.
Streamline your carrier management with high-performance shipping software
EasyPost Enterprise Shipping, a shipping platform built for high-performance shippers, streamlines carrier management with over 100 prebuilt carrier integrations. Businesses like FabFitFun and Fenix Outdoor use EasyPost Enterprise to print thousands of labels per minute, customize their shipping with configurable business rules, and gain end-to-end parcel visibility.
With 24/7 support and better than 99% uptime, EasyPost Enterprise won’t let you down—even (and especially) during the busiest times of the year.
Talk with a shipping expert to learn if EasyPost Enterprise is right for your business.