When you launch an e-commerce business or are a growing manufacturer trying to expand into international markets, the challenges are many. But the most daunting question every company has to answer is – How are we going to find a suitable ocean carrier for shipping the products?
Selecting the right carrier can be a challenging decision with lasting consequences. It is one of the most critical decisions supply chain managers have to make. A shipping carrier will significantly impact the company’s supply chain ROI. Selecting the wrong carrier would result in wasted time, money and, most importantly – unhappy customers!
Here are six factors to consider while choosing a shipping carrier for your business.
1. Price and Quality
Pricing is one of the determining factors for most companies when choosing a carrier. Companies tend to choose a low-cost carrier most of the time, assuming that they could save costs. But as a shipper, you should take into account your business priorities and ensure you choose a carrier who can deliver your orders on time and without any damage/ loss of goods.
While choosing the least expensive carrier could save some money initially, the choice could prove harmful in the long run.
2. Delivery Times
Transit time must be one of your top priorities while choosing a carrier, as this directly impacts your business. Shipping via the ocean takes days and weeks, and if the shipments are delayed beyond the expected arrival date, it will be an unpleasant experience for your customer. Providing a positive customer experience depends on the timely arrival of your freight to the customers’ destination. So, it is vital to select a carrier based on their Estimated Transit Time (ETT) between two regions. You’ll want to choose a carrier whose ETT fits your supply chain requirements.
As we mentioned earlier, choosing a low-cost carrier to save a few dollars could do more harm than good. A reliable carrier is as much a part of building your organisation’s reputation as your own team. Before choosing the carrier, it is essential to ensure that the carrier is highly reliable. A great way to evaluate this reliability factor is by looking at the carrier’s level of service (LOS) rates. If the LOS rates are high, it means the carrier is reliable.
Almost 90% of traded goods are carried over the waves. While choosing a carrier, you trust them with cargo worth thousands or perhaps millions of dollars. Your shipment must be delivered safely without any loss or damage unless caused by elements beyond control such as weather or war. Here’s what you should check with the carrier when it comes to safety:
- Up-to-date insurance arrangements/ log-keeping practices
- Exemplary safety rating or accreditation
- Legal supply operations
- Clear accountability and proper protocols for accident prevention
5. Asset vs Non-Asset-Based Shipping Carriers
When choosing the right carrier, you need to choose between two types of carriers based on your business needs — Asset-based carrier and a non-asset-based carrier.
Asset-based carriers own all of the equipment, such as trucks and tools for hauling. Asset-based carriers will ship your freight on their trailers and use their trucks driven by their drivers. These types of carriers are often preferred as they are full-service types of a carrier that require no extra overhead fees. A non-asset or brokerage carrier does not own all the equipment and partner with subcontractors.
Deciding whether to choose an asset-based or a non-asset carrier should be based on your business requirements. If your business needs services such as warehousing, shipping, and inventory, it would be better to opt for an asset-based carrier.
As businesses and customers become more environmentally conscious, carriers are expected to demonstrate their environmental commitment. As customers are ready to pay extra and buy from companies following sustainable practices, many organisations are prioritising sustainability in every link of the supply chain.
Sustainability is no longer a trend but a standard that companies are quickly adapting to. You need to choose a carrier that follows sustainability practices and focuses on reducing the ecological impact. Partnering with such carriers can show your commitment to the environment and help build your supply chain image among your customers.
A common problem among most carriers
No matter how good your carrier is, most carriers have a downside, irrespective of how well they perform in the other areas. Most of the tracking software the carriers use is limited in its tracking capabilities. The movement of the shipments is often not updated in real-time on the carriers’ websites.
But as we know, real-time shipment tracking is crucial for a great customer experience and proactively managing any bottlenecks. For this reason, many companies have started using real-time tracking software offered by third-party logistics firms as they can track any number of shipments and carriers in real-time.
Delayed shipments are not uncommon in ocean shipping. But even a few days’ delays could mean a considerable loss of revenue at times, and this is where selecting the right carrier could make all the difference. When choosing a carrier, it is essential to decide based on the company’s supply chain needs, and these six factors should help you get a head start in that decision making process.
Please feel free to contact us if you wish to know more about selecting the right carrier for your shipments based on historic data collected over several years.
You may also be interested in reading our recent blog – Three proven ways to avoid container demurrage and detention charges