Service Cited as Core of Carrier-Selection Process

Reliability is the most important factor in core-carrier selection, followed by rates.

By Staff -- Logistics Management, 9/1/1998

Shippers are spending more, and they're spending it with fewer carriers. The core-carrier concept is alive and well as shippers make efforts to improve transportation service as well as cut their costs.

Although some shippers are increasing the number of carriers they use, more often they are cutting the number of providers in just about every mode. Only in the use of surface-parcel carriers, where the choices are relatively limited, is there a slight upward trend in the number of carriers used. Sixteen percent of survey respondents said they were using more package carriers and 9 percent said they were using fewer.

At the other end of the spectrum, national LTL carriers have their work cut out for them: 37 percent of shippers said they were using fewer LTL carriers, while only 15 percent said they were using more. Even among regional LTL carriers, widely considered to be the "hot" segment of the trucking business in recent years, the trend is toward consolidation. Thirty-six percent of shippers said they were using fewer regional carriers, while 23 percent said they were using more--a significant finding, since 40 percent of respondents said their total spending for regional LTL was increasing.

Shippers made their reasons for moving toward core carriers clear when asked what attributes were most important in selecting a core carrier. Respondents said they looked for reliability at reasonable cost, as evidenced by the fact that "on-time pickup and delivery" ranked at the top of their list, immediately followed by "competitive rates." In a separate question, shippers were asked which goals and objectives for their predominant mode of transportation (in most cases trucking) were most important to them. Ranked above all else were two items: tighter and more consistent pickup and delivery, and carriers that were proactive about service issues. The issue for most shippers was not one of leverage alone, but also of seeking carriers that consistently made deliveries on time and intact.