By Chris Lange, Burke Thompson
Not every organization’s motor carrier network requires sophisticated software, IT hours and infrastructure, and major capital investments for improvements in visibility and performance. What’s more, even high-performing logistics groups can miss out on some of the most basic, cost-effective, and error-proof ways to better manage their network. Below, we will look at three basic steps for improving and managing your motor carrier network.
1. Collect More Data During Motor Carrier Onboarding
At a minimum, carrier onboarding for most organizations consists of soliciting basic business information, such as I-9 forms, signed Ts and Cs, and payment information. However, collecting even the smallest amount of additional information can yield vast improvements in your network. For instance, irrespective of the standard payment terms, what are your carriers’ preferred terms? Would they be willing to discount rates for early payment? What other benefits aside from payment terms are important to them? Aside from the assets they have committed during negotiation, what other assets do they have? (power units, driver counts, kinds of trailers, etc.)
The onboarding process should collect not only the information required for doing business, but it should also collect information to help your organization better understand its carriers. This same information can be used down the road to evolve your network and fast-track major project work, manage highly seasonal demand, or expedite sourcing events.
2. Use Motor Carriers’ DOT Numbers to Manage and Tie Together Their Information
Though it could be argued that this step is an outgrowth of the previous one, collecting carrier DOT numbers is far more useful than collecting their EIN. Though it is not necessary to know their DOT number to do business, it is an important and quasi-immutable record that can tie together everything from payment processing, risk management, ticketing systems, and pertinent anecdotal information (on-time pickup and delivery, historical interactions, safety information, etc.). At Impendi, we have interacted with numerous logistics groups, and very few are effectively capturing and using this key piece of data.
Transitioning to DOT number as a master key for your carriers ensures that you are not beholden to keystroke errors, DBA names, or other inconsistent datapoints to manage and understand your carriers and traverse different data sources. Furthermore, it will allow you to leverage a third party to validate insurance information, view safety scores, and validate operating authority.
3. Expand the Scope by Looking at More DOT Data and Beyond
Whether you check your carriers manually, use a third-party software solution, or receive monthly reports from DOT data sources, there is likely more useful information in the DOT data that may lower your costs and risks. DOT Safety Measurement System (SMS) ratings are a great start, as are basic flags for operating status (active or inactive), carrier operations (interstate, intrastate hazardous material, or intrastate non-hazardous material transport), and entity type (identifies the entity as a carrier, hazardous materials shipper, both a carrier and a shipper, broker, freight forwarder, or registrant).
The latter is particularly useful when coupled with your own internal ticketing or AP data. For instance, over 92% of all DOT numbers are registered solely as carriers. Whereas 4% of DOT numbers are registered solely as brokers. Less than half a percentage point are registered as carriers and brokers (and potentially as another additional entity type). Why is this important? When coupled with your own data, you should be able to see who is brokering legally and better understand whether double brokering or co-brokering is occurring. Lowering rates of illicit brokering activity will not only lower your costs, it will also lower your liabilities.
Improving, futureproofing, and lowering risk in your motor carrier network can be as simple as capturing some additional data points, tying all your data together with your carriers’ DOT Number, and using this number to aggregate additional sources of data. Low-cost tools for managing insurance requirements, safety requirements, rate cards, and carrier alerts are more readily available now than ever before, but often, we find that many logistics organizations don’t have the proper information to even begin to leverage these tools. Enabling your carrier network doesn’t have to be a tremendous financial burden or resource cost. Sometimes, it just requires capturing and using just a few new points of data.
Reach out to Impendi to learn more about enabling better carrier management, including our offerings in risk management, finding capacity, and more. We’ll find the right solution for you!
Want to learn more? Please contact Impendi and our cadres of transportation experts.