Transportation & Logistics Analysis

How to win the loyalty of shippers

October 07 2019

For all transporters, the return to work after the holidays is already well under way. The immediate priority is to give clients optimal service during this active end-of-year period. But it is perhaps interesting for carriers to work at the same time on their strategies with the aim of distinguishing themselves from the competition and rendering themselves required partners in periods of low activity, whether for the shippers they already serve…or those they hope to win over.

Client loyalty is a key asset in a company's success. Here, we are going to run over all the factors for a transporter to take into account to win customer loyalty.

Let us first put shippers into categories so as to highlight their respective needs. If we go beyond the celebrated maxim that each shipper is unique and simplify as far as possible, we can split shippers into three main groups:

  • "Primaries" (raw materials). These are the producers of raw or primary materials, the ones who supply the "secondaries". They include agriculture, quarries, steel producers and chemical manufacturers. In this group the transport norm generally involves one product reference and one delivery point per journey. In general, full trucks are used.
  • "Secondaries" (processers). They turn the primary product into a packaged product. In this group, the transport norm involves several product references and one or several points of delivery per journey. Transportation is generally by palette.
  • "Tertiaries"(retailers). They distribute the products produced mainly by the secondaries but also to a lesser degree by the primaries. They include retail distribution, trading, major supermarket chains and construction. The transport norm for this group involves multiple product references and multiple delivery points per journey.

1/ Costs first

For commodities shippers, transports costs can amount to 20% of turnover. This proportion is enough to understand their "cost-oriented" attitude.

These shippers are extremely watchful for any change in transport price. The added value of transporters, therefore, involves being able to propose a service enabling them to reduce their own costs and those of their clients in durable fashion. This might mean new equipment to increase the size of loads, a new service reducing the shipper's workload: e-CMR consignment notes which reduce administration time, drivers carrying out their own registration procedures or loading operations and thus reducing shippers' operating costs).

2/ Process first

The second category are the processers. These are generally industrial concerns which subscribe to the Lean Management philosophy or Six Sigma method. From a theoretical point of view, they see transport as one of the seven major causes of "waste" along with unnecessary movements, waiting time and overproduction.

In this context, the carrier can sometimes be seen as a necessary evil rather than as a partner. Production is seen as a linear process which should be optimised to reduce the impact of the different events which can hamper its operation.

The transporter needs to give priority to proving that the transport process is efficient, reliable and robust. In the event of a deficiency, the system needs to be able to provide reactive and pro-active solutions for the problems which have occurred or could occur. The strength of the position of transporters on this market will depend on their quality control, alert and anomaly resolution systems.

3/ Service first

This last category is client focused. Retail depends on three main elements: stock, restocking and the seller. Stock refers to goods available (or nearly) for sale. Restocking refers to ability to renew stock available for sale. And the seller is the one who wins over the client and makes the final sale. If one of these three elements is deficient, there is no sale. This is why retailers have developed solutions to accelerate restocking and advise the seller as to stock availability.

Transporters will be seen as partners if they are able to fit in to their clients' systems. If they are customer-oriented, they will be able to provide value via their reactiveness and proactiveness and the interface between their systems and those of the retailer. Real-time technology and optimisation algorithms are welcome.

4/ A practical tip

If you come across a buyer who is impervious to your added value proposals and is fixed solely on getting the lowest possible price despite operational personnel being receptive to your arguments, bide your time. The wind will turn in your favour.

Do not forget that the size of your clients is important. Organisations with matrix structures which can seem to have contradictory objectives, are sometime difficult to deal with. The important thing is to find out who has the power of decision.

Successful business dealings to all!

Photo : @Pixabay

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With more than 20 years of experience in the international supply chain, William works as a road transportation expert for Upply. Entrepreneur by nature, he has successively worked in operational and functional management among various industries, such as chemistry, automotive and building materials; alternately shipper and service provider.
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