When shopping truck rates, most shippers compare prices on a given lane from various carriers to find the cheapest provider.
While this may seem like the logical approach to mitigating transportation costs, there are a few common issues associated with using a quoted rate as the sole decision driver, especially when that freight is headed to a retail customer.
Why? Because not all truck rates are created equal.
Many simply do not include the shipment details necessary for conveying the true cost of completing your order.
There is more that goes into a retail shipment than the origin and destination zip codes.
If a truck rate seems too good to be true, it likely is.
It is important to understand all that goes into a truck rate so you can adequately account for all possible costs. That way, you are not left vulnerable to added expenses after completing transport.
Continually opting for the most appealing rate on paper can cost you more in the long run than choosing a provider that quotes with transparent and accurate pricing.
In retail shipping, often what you pay for is what you get. It is important to dig deeper into your rate to ensure you will receive the service necessary for completing the order.
Your rate should include and account for common costs associated with retail transportation like:
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- Accessorial Charges
- Appointment Details
- Receiver Specifications
- Additional Order Requirements
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These fees, if not applied to your quote, can make it difficult to forecast the true costs of a shipment.
Furthermore, if the logistics provider you are working with does not provide the customer service level and attention to detail your customer requires, you may incur additional monetary and non-monetary costs like:
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- Retail Compliance Fines
- Stunted Growth with Retail Customers
- Service Failure Headaches
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A truck rate also includes value-added services that can’t be ignored. Often looped into the idea of logistics customer service, there are “soft” benefits you should consider when choosing which logistics partner you work with.
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- Covered Labor Costs and Added Time
- Carrier Relationships
- Insights into Transportation Performance
- Expertise and Logistics Problem-Solving
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To see the true costs, let’s start with the details that should be included in all retail truck rates.
Accessorial Charges
Accessorial charges are fees added to a freight bill for additional services provided by a carrier.
These charges will oftentimes be assessed and applied after the shipment has been completed making it difficult to forecast final costs.
But a quality logistics partner should ask you about the nature of your order and for specific details so you can plan for these charges in advance.
Common accessorial charges like after-hours delivery, liftgate requirements, lumper services, and inside delivery can all incorporated into your rate upfront.
These should all be applied to a truck rate ahead of time to more accurately reflect the true cost of a delivery.
Appointment Details Impact Truck Rates
Many shipments require delivery appointments, particularly in retail logistics.
The truck rates you receive should account for appointments on both ends of shipment. The reason being, a driver may need to adjust their service hours to meet specific appointment times or disrupt their typical schedule to arrive at a location on time. This often includes an added fee.
It is critical that your logistics partner plan for these driver requirements and build them into a shipment’s estimated cost.
Warehouse and Receiver Details Matter for Truck Rates
Where your freight is going is a crucial component of the rate equation as well. Retail locations often require appointments as noted above, but receivers have other characteristics that should be accounted for.
Some facilities are notorious for holding drivers in detention or not staying on schedule. Detention fees will be transferred back to you. Addtionally, the driver may charge more upfront to even go to these locations, adding more costs on top of detention.
These practices are not only frustrating, but they can also cost you extra money. Along with accessorial charges, warehouse and receiver behavior can run up your rates.
Your rate should come priced with location details in mind.
Additional Service Requirements
Chances are your retail freight is valuable and sensitive to damage. It most likely requires an extra level of service than say car parts or industrial supplies.
If your product needs added attention or protection, it is critical that this is incorporated into your rate ahead of time.
Failing to work with a provider that understands your product’s needs can cause you to be billed for accommodating them later. Or worse, you may not receive adequate service, which can expose your product to the risk of damage or spoilage.
Ensure service specifications are communicated and billed into your rates.
Other Costs and Impacts from Inaccurate Truck Rates
It is important to have an accurate truck rate at the time of shipment. When requirements are not clear or established upfront, you may end up booking with a provider unable to service your shipment and can incur additional costs and repercussions from customers.
Underquoting a shipment and later tacking on fees is indicative of poor communication, customer service, specialized knowledge, and attention to detail.
Let’s explore some of the additional monetary and non-monetary costs of using logistics providers that may not provide these qualities.
Retail Compliance Fines
Compliance programs, like Walmart’s OTIF, have become common for many retailers. Though some of the technical points of different retailers’ programs may vary, the concept behind each remains the same.
Big box stores want their vendors to get product into their supply chain in a timely manner to avoid out-of-stocks. If shippers are unable, retailers can inflict monetary fines to compensate for lost sales. These added fees can cause transportation costs to bloom far beyond the original truck rate provided.
Because individual retail compliance programs vary, it is critical to know the specifications of each and communicate those to drivers at the time of booking.
If you are not well-versed in the specificities of retail requirements, work with a logistics partner that is. Doing so will give your organization the best chance at avoiding fines and late fees that come with missing due dates.
Stunted Growth with Retail Customers
On top of the monetary impacts of late or missed deliveries, retail relationships are put at risk. Retailers are known to terminate relationships with brands that have repeated issues with on-time and in-full delivery and to give preferential treatment to brands that can continuously meet delivery requirements
In a 2019 survey of retail buyers, “100% of respondents said that a vendor’s ability to deliver product on-time impacted their willingness to work with them.”
Your truck rates should include any added services required to meet retailer demands.
By continually missing on-time requirements, you jeopardize your relationship with retailers, which can limit your brand’s growth, and cost you far more than a minimal upcharge on transportation.
Service Failure Headaches and Fees
Some carriers are not equipped to handle retail deliveries. Unfortunately, this information is often not disclosed prior to booking a shipment.
This can leave you in a lurch and forced to deal with the ramifications of a service failure like finding recovery shipping options or rescheduling deliveries.
Recovery trucks, storage fees, and redeliveries aren’t cheap. Booking the right carrier upfront can prevent these costs from stacking up. While service failures are an unfortunate reality in transportation, many are foreseeable and preventable.
What Else Comes with a Truck Rate?
Truck rates are also indicative of value-added services provided. The true worth of a rate includes “soft” benefits, which differ vastly between service providers. Some 3PLs may provide little to no value beyond the movement of product from A to B, while others add value in spades.
Here are some of the value-added services you should consider when gathering truck rates.
Covered Labor Costs and Added Time
How much does the provider take off your plate? There is a lot that goes into coordinating a retail shipment. Deliveries require appointments to be set in advance, carrier pick-ups to be scheduled, and location updates to be tracked along the way.
This takes quite a bit of time, skill, and communication. If your brand is still in its adolescence, transportation may be a secondary duty of customer service staff or sales representatives. Liaising between partners and following through on retail orders takes them away from the primary job responsibilities.
Day-to-day logistics duties can keep your employees from completing other tasks, adding up to inefficiencies and unnecessary labor costs. Duties may even require added hires and increased payroll.
Your truck rates should come with these added services so you can be removed from the minutia of transportation tasks. Save yourself both time and added labor costs by working with a true logistics partner that takes all this work off your plate.
Carrier Relationships
Logistics customer service extends to more than just you as the shipper. It is important that you work with a provider that treats drivers well and aims to build relationships.
It is more difficult to lock in capacity when strong carrier relationships are lacking. This can leave you in a bind when the trucking market tightens, or service failures occur.
When drivers have mutual respect with the brokers they work with, they are more willing to accommodate last-minute requests or changes. This equates to more reliability and overall better service.
It’s a good idea to check Google reviews and evaluate whether truckers respect the 3PL you’re working with.
Insights into Transportation Performance
Leveraging your logistics data to uncover meaningful insight into your transportation performance is invaluable. Doing so can help you simultaneously improve performance while reducing spend.
Some providers are unable to capture, present, and analyze your data. Others charge additional fees for these services and more still to consult you on improvements.
Quality logistics providers offer data capture, visualization, analysis, and consultation for free. Evaluating your data is critical for improving on-time delivery and paring down costs. Without, you are likely leaving money on the table.
Expertise and Logistics Problem-Solving
There are many nuanced points to shipping your product into a retail network, many of which require specialized experience and knowledge.
Understanding delivery requirements, receiving locations, and having a qualified carrier network are all important to improving your supply chain. Working with a provider who specializes in your industry can prove highly beneficial.
Additionally, a logistics partner that steps in and solves problems on your behalf can be the difference between a successful and unsuccessful (and costly) delivery.
Things happen in transportation, but your service provider should be there to help fix issues as they arise. Working with a partner that truly cares about the impact transportation has on your bottom line is essential, and something not always reflected in a truck rate.
Reducing the Rate vs. Cost Gap
If you are continually saddled with unforeseen costs after moving a shipment, it may be time to reevaluate your logistics relationships.
Working with logistics firms that prioritize customer service, performance, and partnership can help your organization excel at retail delivery and stand out from the competition.
By focusing on those key offerings, you can also eliminate costly, unforeseen fees that cut into your bottom line and jeopardize your profitability.
Find Accurate Truck Rates and a Valuable Logistics Partner with Zipline
At Zipline Logistics, we make it a priority to accurately price our lanes with all that’s necessary for a retail order. We work to give our customers the most accurate portrayal of a shipment’s potential costs.
That way, you can accurately forecast transportation spend and make profitable decisions about your orders.
Zipline accounts for executional requirements like appointments, handling, and special equipment.
We work to be upfront and honest, focused on retail delivery and pricing transparency. Our retail logistics experts are committed to customer service, critical thinking, and communication.
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