August 2012 | How-To | Ten Tips

Ensuring Routing Guide Compliance

Tags: Transportation Management

When vendors fail to comply with shippers' routing guide instructions, all parties involved experience frustration. To improve compliance, shippers must provide clear and concise instructions about how they want their freight to move. Here is advice on ensuring routing guide compliance from Harold B. Friedman, senior vice president of global corporate development at freight payment and auditing service provider Data2Logistics.

1. Make your routing guide easily accessible. Post the routing guide on your Web site. If you don't have the ability to host the routing guide on your site, many services can do it for you.

2. Keep routing guide information current. If a carrier is no longer in business or is no longer a preferred carrier, make sure you update your routing guide immediately to prevent non-compliance.

3. Be upfront about chargebacks. Your purchase order should stipulate that you will charge vendors back for the cost of non-compliance, plus a fee for the violation. Non-compliance creates a situation where you have to handle an extra carrier at your dock. It is not unusual for best-in-class companies to add non-compliance fees—and it gets vendors' attention.

4. Create a point of contact within your company. Vendors will inevitably have questions regarding carriers. By providing a point of contact at your company, you eliminate guesswork for the vendor—and provide a live person to speak with if specified carriers are unavailable to pick up the freight.

5. Stipulate the criteria for mode selection. For example, all shipments weighing less than 50 pounds should be sent via a parcel carrier.

6. Clearly state the actions required. Your purchase order should state that, as part of the terms and conditions for purchasing the vendor's product, the vendor must select a carrier to deliver the product in accordance with your routing guide, or one of your preferred carriers, if specified.

7. Be specific about geography. If your routing guide is segmented by region, clearly identify the geography that is included in a region. Use states or ZIP codes to define regions.

8. Provide carrier contact information. Include the name, address, phone number, e-mail address, and any other pertinent information carriers provide. This will make it easier for your vendors to do business with them.

9. Divide carriers into categories. The routing guide should list carriers by mode and weight breaks that you want applied in the carrier selection process. This will help the vendor understand your threshold for less-than-truckload vs. truckload carriers.

10. Identify a process for premium freight. If a customer is late ordering a product and requires expedited delivery, the routing guide should detail the procedures the vendor should follow, in addition to the carrier it should use —for example, the vendor may be required to obtain a premium freight authorization number.