7 Areas for Strategic Partnership Between Shippers and Service Providers

Strategic partnerships are developed with focus on 7 areas.

Many shippers I have worked with are well-known Fortune 1000 companies with complicated supply chains. One of the challenges to building strategic partnerships with customers in that profile is that they typically work with between 100-250 service providers — roughly 90% motor carriers and 10% brokers. There is always somebody else competing for the same part of their business you are interested in.

Also, companies that size are well-established in their relationships with service providers — some go back decades. Just getting noticed, let alone getting a chance to win business — can be daunting. However, one of the advantages is that there are many layers of opportunity for partnership in complicated supply chains.
While there is nothing wrong with being a niche player, or regional, or specialized, or only operating on one level. We can all agree that being a diversified strategic partner is the holy grail of long-term partnership and relationship success.
I identified seven levels of opportunity for partnership with large shippers in domestic truckload over-the-road business. If you can be relevant and reliable in serving these target areas, you should expect a career-long, transportable partnership and even deep friendships.

Strategic Partnership Target 1: Primary Level

The first level is primary business — as in primary award from an annual RFP. To gain entry into a customer’s network, you must establish some relevant primary business.

At 30,000 feet, this is easier for motor carriers than brokers, mainly due to their business model. Carriers know their costs, their lanes, and their network, and ‘cost’ isn’t really market-based. Price is market-based, and operating cost is not.

For brokers, this winning primary business may be the most difficult because you compete against 100 other providers who want primary on that lane. Everyone is trying to find a way to somehow do it for less than, well, cost. However, if you can find a way to win primary business and get noticed, you can begin to breathe life into the possibility of a more complicated partnership.

Strategic Partnership Target 2: Backup Level

The second level is backup business — most commonly a little further down the routing guide, say second, third or fourth choice. Your rates are not primary, but they are relevant and close enough that you might be called upon if the primary is not available.

More often than not, I think of this as being a short-lead-time provider. Either 1) the end customer orders more product in a window that the primary is not required to accept and cannot do so affordably, or 2) a primary provider accepted the load seven days ago, and suddenly the assigned driver is unavailable due to detention or returned product or one of many reasons.

Short lead time is a more difficult space to operate in. It is a pressure cooker: the load may already be late as a carryover, there are limited available shipping and receiving appointments, limited capacity, and often you need a second- or third-shift staff to be working to build the loads and get appointments by the next morning.
While it is a pressure cooker, no pressure — no diamonds. This can be one of the most relevant spaces to play while establishing yourself as a reliable strategic partner. This can also be one of the most dangerous. You can’t do it one week, take off a week, and want back in on the third week. Once you say you will be there and then fail to be there, you will be replaced with another provider on that same shipment.

Strategic Partnership Target 3: Seasonal Level

I define seasonal business as around 90 days. Whether it is 100 days of summer between Memorial Day and Labor Day, or 70 days of Q4 from November through January’s first week, every large shipper will experience some seasonality within their supply chain. There will be too much volume for their primaries to cover at some point.

Even if the shipper does not ship seasonal product, marketplace seasonality has a network capacity effect. I believe we all know the high-level seasonality. Fresh produce ships in the growing areas during regional harvest times. Beer, water, and ready-to-drink beverages surge during the summer. Poultry, dairy, and retail surge during Q4. Whatever the cause, there will be times when all shippers with complicated supply chains experience seasonal demands on the available capacity that leave them short of primary providers.

If you establish yourself as a reliable provider of extra capacity during those seasonal periods, not only is it an opportunity for an additional revenue stream, it is an opportunity to further build a strategic partnership.

Strategic Partnership Target 4: Temporary Level

Temporary business is often 30 days or shorter. Often it is unexpected; sometimes it is not. When unexpected, think: natural disasters, work stoppages, infrastructure failures, production disruptions, or geopolitical conflict. For expected temporary business, think: significant holidays, major sporting events, planned production promotions, and pre-buy before announced price changes.

There will always be short term bumps in capacity needs throughout the year, in some years more than others. There will be demand spikes when primaries cannot supply capacity. Although being available to help your customer during temporary times of need may not account for a large percentage of your overall business with them, my experience is that it does account for a large percentage of the overall value you bring to the relationship.

Strategic Partnership Target 5: Strategic spot

The fifth level of partnership is what I define as a strategic spot market. In the hybrid digital world, this is API, real-time, dynamic price routing guide. This is playing in a space where loads are not covered by design.

Maybe the shipper does not want to award this portion of their business to primaries so they can play the market. Alternately, they may be more strategic about selecting the providers they want to get the first shot at loads or domiciles that need extra capacity.
The providers in this space are normally fewer in number than in the open market. Often these carriers have already established some sort of strategic value within the network. If you can build the capability of providing real-time pricing and have the bandwidth to provide real-time capacity, it will improve the quality of your relationship with your customer.

Strategic Partnership Target 6: Transactional Spot

Transactional spot is the space where loads are not covered by mistake rather than by design. There was a plan and a routing guide that matched capacity with demand forecast, but something went wrong.
As strategic as you may be in your customer’s supply chain — you may be there for primary, for backup, for seasonal, for temporary, for strategic spot — there will always be some percentage of their business that will go to the good old-fashioned user-interface, web-login, debauchery that we all know as spot auction.
This is where everybody operates — both strategic and transactional — and it is known for high prices and low service levels. Nonetheless, it is a place to cut teeth and prove yourself: prove that you will be there, prove that you will be a reliable partner, and maybe even convert some regular isolated load awards into volume lane awards.

Strategic Partnership Target 7: Expedites

I left the best and most relevant for last. The seventh level of partnership is the expedite. If you don’t and can’t do this, you don’t get a crack at the middle five levels.

This is the “Navy Seal” load: leave your family at the restaurant at dinner, leave your kids in line for a ride at Disney World, and stay up all night on the phone with the driver talking about the old days of paper logs and your first time going up/down Grapevine and the despair of watching your last truck get towed away by the bank. This is the send in four trucks and pay three TONUs, it absolutely cannot fail under any circumstance load. It is the scenario where you are saying, “I am here for you and always will be because you matter to me, and for some reason, this load of high-fructose corn syrup matters that much to you and your customer, so we are going to find a way to get it done against all odds.”
If you are reliable, you get doors opened in the middle five target areas.

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Get Noticed, Build Familiarity, Earn A Strategic Partnership

Large and complex shipper supply chains are not an arena to gain easy entry. Trust and relationships have high barriers. Familiarity with the network and individual site needs is expected when you don’t have the benefit of experience to gain that familiarity. Murphy’s Law is that something will always go wrong with the first shipment when all eyes are on you and fingers are on the trigger.
Yet, there is also huge value not just to having diversified accounts but diversification within accounts — almost customers within customers, different buyers. Through the ups and downs of my career, I learned that if I can be reliable in these seven levels of partnerships, then I have a high likelihood of work-to-do. My customers have a high likelihood of finding value in a strategic partnership with me. In an endless sea of competition, getting noticed may be the most difficult thing to do, but if you do, shoot for all seven, and you will likely find yourself in a lifelong partnership.

Let’s discuss the value of a strategic partnership with Surge Transportation, a Diamond sponsor for MercuryGate Velocity 2022. If you’re attending Velocity, please join us for the panel discussion, Keeping up with the Accelerated Pace of Change. Check the Velocity agenda for more details and be sure to visit the Surge Team in the exhibition hall throughout the conference.

Start a Strategic Partnership with Surge.

Omar Singh
President & Founder
Surge Transportation
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