Trucking Relationships: In It for the Long Haul
Supply chain disruption is testing relationships between shippers and their core trucking carriers. Here's what transportation partners are doing to preserve their ties—today and for the future—in challenging times.
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From children who couldn't play with friends to adults who shifted happy hours to Zoom to families stuck with window visits at the nursing home, people have seen COVID-19 disrupt relationships. Something similar has happened to shippers and their core trucking carriers.
Every long-term commercial relationship has ups and downs. But since early 2020, the pandemic—which brought business closures, surges or drops in demand for certain commodities, a tsunami of e-commerce shipments, new safety protocols, and other challenges—has tested shipper-carrier partnerships in new ways.
Successful partners learn to adjust. The tactics shippers and truckers use to strengthen their bonds in the current emergency suggest broader lessons about how to reset strained relationships and keep them healthy for the long haul.
Ask transportation professionals how to build strong relationships—the kind that will see you through in both normal and exceptional times—and one message comes through loud and clear: You need to talk.
"We're not only in the transportation business—we are also in the communication business," says Dominic Zastarskis, chief executive officer at GP Transco, a full truckload carrier based in Joliet, Illinois. "Anyone with a truck can transport a shipment from point A to point B. But what do you do when something goes wrong?"
Proactive communication is the key. That means sharing information about expectations, forecasts, capabilities, changes in shipment status, and performance results.
When Ryder Systems' "asset light" division enlists a core carrier for a shipper, it starts by defining the shipper's service and volume requirements. "Once we have those requirements clearly communicated and documented, then we align on what volume and capacity those carriers can provide," says Dave Belter, vice president and general manager of global transportation management at Ryder.
In its asset-based dedicated trucking business, Ryder uses a process called customer due diligence to launch its relationship with a shipper. "Prior to rate contracting, we'll sit down and, with a very thorough lens, go through the request for proposals and validate all of our assumptions," says Steve Martin, Ryder's senior vice president of dedicated transportation solutions.
Then, as Ryder implements the plan, it measures performance. "We create an environment of transparency that builds trust," Martin says.
Information flow also plays a critical role while shipments are in progress. "You need to implement a proactive way to communicate delays," says Zastarskis. For example, GP Transco uses an application programming interface (API) to pull data from the National Weather Service into its proprietary transportation management system (TMS) and leverages that information when building routes.
"That helps us to proactively communicate to the customer if any delays are expected," he says.
While shipper-carrier collaboration relies on shared facts, it's equally important to forge trusting personal relationships. Austin Hurst, co-founder of eOn mist, which launched a disinfectant and hand sanitizer business in 2020, has formed such a bond with a call center representative at Averitt Express.
"He tells me what will happen, and it always does," says Hurst. "That takes a lot of extra effort—a lot of phone calls being made behind the scenes. His mission is, 'I can't fail eOn.'"
Face to face, or screen to screen
Many partners use in-person meetings to strengthen their personal bonds. Site visits also give shippers a chance to better understand what carriers can provide.
"We encourage reps to bring customers to our facilities and show them how our tools work," says Steve Hartsell, vice president of field sales at Old Dominion Freight Line (ODFL), a national less-than-truckload (LTL) carrier based in Thomasville, North Carolina. For example, employees demonstrate how they use dunnage to protect freight in transit.
In pre-COVID-19 times, Sweetwater, an e-commerce retailer of musical instruments and music technology in Fort Wayne, Indiana, held periodic face-to-face meetings with its primary carriers. "They would walk through to take a look at the docks and the distribution center," says Robert Gerwig, senior vice president of distribution and logistics. Then the partners would adjourn to a conference room to review metrics.
In the COVID-19 era, meeting face to face can be a risky proposition. But shippers and carriers have found other ways to keep up their conversations.
ODFL sometimes has food delivered to a customer's location, so the customer and an account rep can have lunch together while meeting on Zoom. "We have had some face-to-face meetings, but most of them were in the lobby or parking lot, where everyone wore a mask and stayed six feet apart," says Hartsell.
Technology helps Schneider Logistics and its contract customers communicate more often than they used to pre-pandemic. "Relationships still matter, and they matter even more in a situation like this, where we need to help our customers manage through the crisis," says Bill Matheson, chief commercial officer at Schneider in Green Bay, Wisconsin.
Sweetwater still sometimes brings carriers to its headquarters, while carefully following Indiana's safety guidelines and the carrier's own rules. For instance, after holding one business update with FedEx by phone, Sweetwater convened the next one on site.
"FedEx's corporate travel and face-to-face meeting guidelines had changed," says Gerwig. "And it was helpful, because that was the first time they had been in our new distribution center."
Besides forcing new strategies for business meetings, social distancing protocols can also disrupt shipper-driver interactions. "Some customers no longer allow our drivers on their docks to make sure that the shipments are properly loaded and secured," says Zastarskis.
Drivers still check the loads once their trucks have left the docks, he adds.
And GP Transco makes sure that drivers appreciate shippers' safety concerns and follow their rules, says Sergey Bort, the company's vice president of marketing and strategic business development.
An internal Facebook page, where GP Transco's drivers discuss their interactions with shippers, provides valuable insights, helping the company understand its customers' needs. "We learn things about shippers that we wouldn't know, because we're not at the shipper every day, as the drivers are," says Bort.
Ryder has created a task force to monitor COVID-19 safety guidelines as they change over time, and it works with customers to adapt business processes to meet those requirements. For instance, Ryder created a "drive-by dispatch" process for one grocery distributor.
"Drivers would stay in the truck, and we created a way to exchange documents in a distanced way that allowed us to maintain personal protection," says Martin.
Adjusting to volatile demand
While safety protocols challenge personal relationships, the pandemic's economic effects have strained partnerships by altering shipping patterns—closing factories, boosting demand for some products, and slashing demand for others.
"Some shippers saw increases in volumes that exceeded 20%, or in some cases 30%, of normal," says Matheson. Trucking capacity tightened and prices rose.
Those changes created headaches for supply chain managers, who have been under pressure in recent years to keep their operations tight in terms of velocity, visibility, and speed. To keep product flowing, shippers and carriers have had to make significant adjustments.
Schneider has tried to smooth the transition by assembling data about changes in the market. Supply chain managers use this information to persuade corporate leaders that if they want capacity, they'll need to rethink their transportation contracts.
"The first and most obvious example is price realignment," Matheson says. Truck drivers are doing a terrific job during the pandemic, he says. But it costs more these days to retain drivers and recruit new ones.
Averitt Express faced the opposite problem. When COVID-19 forced some of its dedicated service contract customers to shut in the spring of 2020, drivers who served those accounts suddenly had no work. Averitt didn't want to see those drivers move on to other employment.
"Customers knew they would come back into operation," says Rogers Luna, vice president of sales at the trucking carrier, based in Cookeville, Tennessee. "They had relationships with the drivers, and they wanted those drivers back."
Luckily, COVID-19 relief dollars helped Averitt preserve those relationships. "The federal government stepped in and allowed drivers to be paid while on furlough," Luna says.
As demand patterns have fluctuated during the pandemic, Ryder's asset-light business has used business intelligence technology to monitor changes in customers' shipping networks.
"That allows us to immediately see where the volumes are shifting and what lanes are underperforming," Belter says. Measuring factors such as tender acceptance and on-time pickup and delivery, Ryder pinpoints lanes that need more capacity or more responsive providers.
Ryder's technology can also overlay different shippers' transportation networks on screen, revealing where carriers are delivering loads and which markets need more capacity. "Then we can talk to our carrier partners about potentially contracting that capacity on another lane," Belter says.
While some shippers and carriers struggle to match capacity with demand, others see relationships falter due to erratic shipping schedules.
For instance, when Sweetwater's vendors face glitches in their own supply chains, it's hard to give reliable information to Sweetwater's inbound carriers. Sometimes a truck will show up at a supplier for a scheduled pickup, only to find that the shipment isn't ready.
So Sweetwater coaches suppliers on the importance of frequent status updates, and it micromanages its relationships with carriers to keep them informed. "Pre-COVID, maybe we would talk to the account manager at a trucking company," Gerwig says. "Now we call the account manager, the branch manager, and in some cases, we call the drivers."
Advice for the long haul
Shippers working to maintain good relationships with core carriers, during the pandemic and for the future, can start by using data to gauge the quality of current partnerships.
"Measure some key performance indicators to make sure the carrier has capacity for you, that you are important enough to them to bring trailers, to have drivers pick up and move your freight," says Hartsell at ODFL.
Some shippers come right out and ask how important they are to the carrier's business and whether the carrier plans to offer more service in key geographic regions. "We tell them how important they are to us and what our plans are," Hartsell says. "The key is, you have to stick to it." Carriers should never overpromise, he adds.
Martin also points to the role of metrics: "Agreeing on what you're measuring keeps a quantified focal point that helps you identify when things aren't working," he says. "It creates an opportunity for both parties to participate."
While numbers are important, shippers and carriers also should spend time building their relationships. And those relationships need to be collaborative, not adversarial. Partners who feel comfortable with one another don't hesitate to share bad news when it comes up. "Then you can start working on a compensating strategy," says Gerwig.
"The only lasting relationships in supply chains are those that are win-win," says Matheson. "Make sure there's open dialog and try to understand the other position as well as you understand your own."