by Tim Brady
, Business Editor
One of the many challenges facing a small or micro-motor carrier is that it requires several different and diverse skills to be successful. Three of the greatest skills are proprietary to each individual carrier: dispatching style, customer base, and hauling rate structure. The knowledge and information contained within those skills are what defines your company and separates you from your competitors. Provide this information to only those who need to know, as this information has a direct, positive benefit to your operation.
With that said, another challenging area for many micro-carriers is the cost of expansion. One of the least costly means of expanding and growing your business is through partnerships with other businesses. These augment your skills and knowledge by adding another company’s expertise to the benefit of both companies.
So, who are some potential partners? How about an already-established customer that you could work with to provide them with an advantage over their competitors? In return for helping them reduce costs in other areas, they would provide your carrier with a higher hauling rate. For example, say you have multiple trailers already loaded with their products (or stock from their suppliers) parked on your trucking company’s drop lot. This gives them savings in two areas: one, they’re not having to warehouse the load or include it in inventory until they need the product, saving the cost of storage; and two, at the end of the year, since the vendor has shipped the product and the customer hasn’t taken delivery, neither has to include the items stored in your trailers as inventory, thus saving on taxes.
BROKERING A DEAL
Another potential partner would be a freight broker who has shippers requiring specialized services that the brokers’ current carrier base is either unable or unwilling to provide; for example, a shipper that needs ground service rather than dock delivery, or placement and assembly of the delivered items at the receiver’s place of business.
A third option would be a motor carrier that has equipment and/or skills you and your drivers don’t have; for example, you may specialize in van loads, but a customer comes to you requesting flatbed service for a new product they’re offering their customers. While not in your plan to expand into flatbed service, wouldn’t it be best to keep your customer by having the other carrier haul the new products?
Following are some questions you and your prospective partners should ask one another to determine if the partnership will help both companies work together more effectively:
Carrier to customer/broker
Customer/broker to carrier
- 1. What are the biggest challenges you face concerning your shipping or receiving?
- 2. How can my carrier help you meet these challenges?
- 3. What’s the best means for my carrier to deliver these solutions?
- 4. Are there gaps between what my carrier currently provides you and what you really need from us?
- 5. What are some other problems with which we can help you?
- 6. Are we providing services you don’t need?
- 1. What are the biggest challenges you face concerning your pickups or deliveries?
- 2. How can my company help your carrier meet these challenges?
- 3. What’s the best means for my company to implement these solutions?
- 4. Are there gaps between what my company currently provides your drivers and what you really need from us?
- 5. What are some other problems with which we can help you?
- 6. Are we providing things you don’t need?
Answering these questions will help you and your business partners reach solutions that are beneficial to all concerned. The idea here is to establish strategic relationships with key customers and brokers, thus creating an alliance that results in more profitable business for each of you. This solidifies a bond between your companies, making it more difficult for a competitor to threaten the relationship.
Here are a few more ideas for partnering with customers and brokers:
-Have your customers come to your trucking facility and meet with department heads outside the sales department. One-on-one, face-to-face interaction between customers/brokers and key people in your organization creates a tighter bond between the two businesses.
-Use social media to link internal functions with external customers. Set up a private LinkedIn group to keep the information flowing between customers and departments within your carrier. This will help alert you to problems and challenges before they occur.
-Have representatives of all the impacted departments attend regular meetings designed to improve processes for those departments and the operation as a whole.
-Map out a communications flowchart to ensure that the proper departments within each organization are communicating with each other for optimal results; then make sure department representatives in each company have met face-to-face.
-Bring key personnel from the respective departments together regularly through onsite or online meetings and social media. The goal is to better understand the requirements of each department and each company, and how each can add greater benefit to the business relationship.
A word of caution
The rule of not letting any single company or broker represent any more than 30% of your trucking company’s revenue still stands. Avoid this ‘all eggs in one basket’ approach when developing strategic partnerships. Remember, the greater the percentage of revenue a shipper or broker represents, the more potential for a negative impact if that relationship is severed.
Being a small carrier or company doesn’t limit you to not using large company programs and procedures. A major advantage of a smaller organization is that it tends to be less bureaucratic. By tailoring programs and procedures to both the size and scope of your operation, you will discover ways to develop strong and strategic relationships. This strategic partnering will better sustain your carrier and provide greater opportunity for growth for all of you.
Contact Tim Brady at email@example.com or call 731-749-8567. Join Brady in the Trucking Business Community at www.truckersu.com.