Selecting Transportation Company
When selecting a transportation company, there are several factors you need to consider, especially if you’re running an e-commerce business or expanding into international markets. The challenges can be substantial, and one of the most crucial questions every company must answer is: How do we find a suitable ocean carrier to transport our goods? Choosing the right carrier can have lasting consequences and is one of the most critical decisions supply chain managers have to make. Your choice of an ocean carrier will significantly impact your company’s supply chain ROI, and selecting the wrong carrier can lead to wasted time, money, and most importantly, customer dissatisfaction.
- Price and Quality: When choosing a carrier, pricing is often a determining factor for most companies. Businesses tend to opt for carriers with lower costs, thinking they can save money. However, as a shipper, you should take into account your business priorities and ensure that you choose a carrier that can deliver your orders on time and without any damage or loss. Opting for the cheapest carrier might initially provide some cost savings, but it’s important to remember that it could be detrimental in the long run.
- Transit Times: Transit time should be one of your priorities when selecting a carrier because it directly impacts your business. Shipping by sea takes days or even weeks, and delays beyond the expected arrival date can lead to a negative customer experience. Providing a positive customer experience relies on delivering your cargo to the designated destination on time. Therefore, selecting a carrier based on the Estimated Transit Time (ETT) between two regions is crucial.
- Reliability: As previously mentioned, choosing a low-cost carrier to save a few dollars could result in more harm than good. A reliable carrier is as much a part of your organization’s reputation as your own team. Before selecting a carrier, it’s important to ensure that the carrier is highly reliable. A great way to assess reliability is to look at the carrier’s Level of Service (LOS) rates. If the LOS rates are high, it indicates that the carrier is dependable.
- Security: Nearly 90% of commercial goods transported across the sea are moved this way. When choosing a carrier, you’re entrusting them with cargo worth thousands or even millions of dollars. Your shipment should be delivered safely without any loss or damage, except for uncontrollable factors like weather or war. Some aspects to check with the carrier regarding security include:
- Comparison Between Asset-Based and Non-Asset-Based Transportation Companies: When selecting the right carrier, you’ll need to choose between two types of carriers based on your business needs: an asset-based carrier and a non-asset-based carrier. Asset-based carriers have their own trucks and all the required equipment. They’ll carry your load on their own trailers and use their own trucks driven by their own drivers. These carriers are often preferred as they offer a full-service without extra charges. Non-asset-based or brokerage carriers, on the other hand, don’t have all the equipment and collaborate with subcontractors. The decision to choose an asset-based or non-asset-based carrier should be based on your business requirements. If your business needs services like storage, shipping, and inventory, opting for an asset-based carrier would likely be a better choice.
- Sustainability: As businesses and customers become more environmentally conscious, carriers are expected to demonstrate their environmental commitments. Customers who are willing to shop from and pay extra for companies that follow sustainable practices have seen many organizations prioritize sustainability at every link in their supply chain. Sustainability is no longer just a trend; it has rapidly become a standard that companies are quickly adapting to. Opt for a carrier that follows eco-friendly practices focused on reducing ecological impact. Partnering with such carriers can showcase your commitment to the environment and help you build your supply chain image among your customers.