ATS Transportation Blog

The Real Cost of Using The Lowest Cost Carrier

As a decision-maker who is responsible for managing a budget, it is important to be fiscally responsible with your company’s money. If there’s a less expensive option to accomplish a specific task, as long as it delivers the results you’re looking for, why wouldn’t you do it? Saving money isn’t only satisfying, it’s necessary to help a business run efficiently.

Until it doesn’t.

In a shipper’s market with plentiful capacity, you often won’t have problems finding low prices to move your freight. Carriers want to keep capacity busy and Drivers are hungry. But not unlike shopping for cars, is using price as the leading indicator to move a load the fiscally responsible thing to do? Well, in a word, no.

When it comes to deadlines, safety and responsiveness in transportation, there are a few key factors logistics professionals should consider above and beyond cost when choosing a shipping partner. Without considering these critical factors, your shipments may end up costing you more in the end, not only in hard costs but in customer satisfaction and your company’s reputation.

  • Overhead & Infrastructure
    Is the company you’re booking with able to keep up with your demand? Do they have the facilities necessary to handle your overflow freight? Do they have trailer yards and assets located in places that can get capacity to you in a timely matter? On the other end of the spectrum, are they in over their heads with too much overhead and infrastructure? Can they financially manage to haul your type of freight in the long run? Consider the tenure of the company. If they’ve been around for a long time, chances are they’ve successfully weathered the ups and downs of the market over the years and will be a reliable partner you can count on in the future.
  • Equipment
    How old is the equipment your transportation provider uses? Will it make it from origin to destination without issues that might cause delays? What’s the carrier’s philosophy on performing routine maintenance on their equipment? If they don’t have consistent policies on routine maintenance, that can often mean equipment is only serviced when a problem arises. That could mean your freight is on the trailer when that happens, impacting your delivery schedule. Do they have additional equipment like blanket or pad wrap for added protection of your freight? Or enough straps to tie freight down properly? Pay attention to the condition of the Driver’s tractor and trailer the next time they’re at your dock. What you see can tell you a lot about the company they’re driving for.
  • Technology
    After you book your freight with a company, do they have the technology to keep your loads visible to you whenever and wherever you need to check on them? For example, do they have 24/7 tracking or a portal (including mobile accessibility) that provides you access to your load’s location and the necessary documentation to complete the delivery? Above all, do they have the resources to provide you a dedicated point of contact in the event you have a question? Further, what technologies does the carrier use to keep the Driver, your freight and the public at large—not to mention your reputation—safe and sound? Ask your carrier for details on the systems they use to protect life and your freight.
  • Track Record/Shipment Value/Urgency
    Although there are efficiencies to be gained by using the same carrier for all of your transportation needs, if you tend to side with the lowest cost carrier on most of your shipments, chances are there are scenarios where utilizing those same carriers doesn’t make good fiscal sense. You might be able to get away with lower-cost carriers when you have routine, lower-risk loads that aren’t time-sensitive. But when it comes to complex projects, oversize, over-dimensional, high-value freight or time-sensitive or emergency needs that absolutely must get picked up and arrive on time and unscathed, that can be the biggest separation between carriers. What is your carrier’s track record for on-time delivery? Where is their nearest truck? What experience and training does the Driver have in securing your specific type of high-value cargo? Do they have in-house resources, a seasoned network of relationships and technology to map the best route and fulfill potential permit requirements efficiently? Even when you aren’t in a time crunch or moving high-value freight, consistently evaluating your carrier decisions based on these factors will save you time and money in the end. Don’t wait until the next time your carrier is a no-show or arrives late for pickup to weigh your options.

It pays to consider the bigger picture when choosing transportation providers. In the days of digital information, it’s not hard to find information to vet the reliability, quality and overall reputation of the field of carriers you’re considering. Ask for references. Talk to industry peers and associations. Read carrier websites and reviews and consider all of the above factors to support your decision process. After weighing all of these factors, decide if a bargain price is really worth the risk.

Ultimately, the decision is up to you on how you prefer to move your freight. But the old saying “you get what you pay for” has never been more true than when it comes to transportation.

ATS

Written by ATS

Family-owned since 1955, Anderson Trucking Service (ATS) is a values-driven company offering worldwide transportation solutions.

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