Logistical Decision Model: It Is Not Always About the Price

Knowing your consignee's current requirements provides insight into deciding what service level as a shipper you choose.

All of us in the supply chain vertical are forced to be cost-effective in all the tasks that we perform each day. At times, we only hear management say, "Use the cheapest option" every day for months on end. We then have this drilled into our thought process and that is where the problems start.

As logistics professionals both on the shipper's side and the carrier's side, we need to understand what our consignee's needs truly are. Then, and only then, can we make informed supply chain decisions regarding cost, transit time, insured value of the goods, and which carrier is the BEST FIT for that shipment on THAT PARTICULAR DAY.

A few simple questions are all it takes on the shipper's side to meet their consignee's needs:

1. When do you need the goods delivered?

2. Is this a stocking order or is it for an installation?

3. What is the value of the goods for insurance purposes? (Different carriers have different liability limitations so you always need to validate the insurance coverage)

4. What happens if it arrives later than the carrier's advertised transit time? You may want to consider shipping this as a Guaranteed Shipment - would you like a Guaranteed Delivery rate and transit time?

As a shipper or payor of the shipment, gaining basic insight as to what the consignees' level of expectations are for the delivery, eliminates potential headaches after the shipment is sent out.

At Diversified Transportation Services we do this each day for our clients. That is just one of the factors that separates us from the competition.