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How can you effectively manage carrier performance and ensure on-time, on-budget delivery?

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Managing carrier performance is a critical aspect of logistics management, as it directly affects your customer satisfaction, operational efficiency, and cost control. However, it can also be challenging to monitor, measure, and improve the service quality and reliability of your transportation partners, especially in a dynamic and complex supply chain environment. In this article, you will learn some practical tips and best practices on how to effectively manage carrier performance and ensure on-time, on-budget delivery.

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Define clear KPIs:

Establishing key performance indicators (KPIs) like on-time delivery and damage rate aligns carrier activities with your business goals. Communicate these KPIs clearly to ensure both parties are on the same page for evaluation and improvement.### *Track performance consistently:Use tools like scorecards and dashboards to monitor carrier performance against KPIs regularly. Analyzing this data helps identify strengths and areas for improvement, ensuring carriers meet your

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1 Define clear expectations and standards

The first step to manage carrier performance is to establish clear and realistic expectations and standards for your transportation partners. This means defining the key performance indicators (KPIs) that reflect your business objectives and customer requirements, such as on-time delivery, transit time, damage rate, billing accuracy, and responsiveness. You should also communicate these KPIs to your carriers and agree on the methods and frequency of reporting and feedback. By setting clear expectations and standards, you can align your carriers with your expectations and create a common ground for evaluation and improvement.

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2 Track and measure carrier performance

The next step is to track and measure the actual performance of your carriers against the agreed KPIs. This requires collecting and analyzing data from various sources, such as shipment tracking systems, invoices, claims, surveys, and audits. You should use reliable and consistent tools and metrics to track and measure carrier performance, such as scorecards, dashboards, and benchmarks. You should also review and update your data regularly and share it with your carriers and internal stakeholders. By tracking and measuring carrier performance, you can identify the strengths and weaknesses of your transportation partners and take corrective actions if needed.

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3 Provide feedback and recognition

The third step is to provide feedback and recognition to your carriers based on their performance. This means acknowledging and rewarding the carriers that meet or exceed your expectations and standards, such as by offering incentives, bonuses, or preferential treatment. It also means addressing and resolving the issues and gaps with the carriers that fall short of your expectations and standards, such as by providing constructive criticism, coaching, or penalties. You should provide feedback and recognition to your carriers in a timely, transparent, and consistent manner, and encourage them to do the same for you. By providing feedback and recognition, you can foster a positive and collaborative relationship with your carriers and motivate them to improve their performance.

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4 Collaborate and innovate with your carriers

The fourth step is to collaborate and innovate with your carriers to optimize your transportation processes and outcomes. This means involving your carriers in your planning, decision making, and problem solving activities, and seeking their input and expertise on how to improve your logistics operations. It also means exploring new opportunities and solutions with your carriers to enhance your service quality and efficiency, such as by adopting new technologies, practices, or modes of transportation. You should collaborate and innovate with your carriers in a proactive, flexible, and creative way, and leverage their strengths and capabilities. By collaborating and innovating with your carriers, you can create a competitive advantage and achieve mutual benefits.

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Alejandro Delgado

Experienced Key Account Manager | President ANFABASA | Seafood International Trade Expert | Import-Export Marine Protein Expert | Worlwide Seafood & Fisheries Network Provider | Sustainability Expert
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Nadie mejor que el transportista para mejorar las condiciones del transporte. El transportista en su trabajo diario se encuentra con multiples situaciones que el empresario desconoce, hay que colaborar con el empleado, comunicarse con el y asi mejorar las condiciones laborales del empleado en beneficio mutuo. Un empleado satisfecho rinde mas que uno descontento.

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5 Monitor and adapt to changing conditions

The fifth step is to monitor and adapt to the changing conditions in your supply chain and transportation environment. This means staying updated and informed about the trends, risks, and opportunities that affect your transportation performance, such as customer demand, market competition, regulations, disruptions, or innovations. It also means adjusting and modifying your expectations, standards, and strategies with your carriers to cope with the changing conditions and maintain your performance level. You should monitor and adapt to the changing conditions in a responsive, agile, and resilient way, and communicate and coordinate with your carriers accordingly. By monitoring and adapting to the changing conditions, you can ensure your transportation performance is relevant and sustainable.

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Kingsley Ukpai .M.

I help businesses develop and deploy Supply Chain & Operations Strategies that aid in attaining Organizational goals || I also help bridge knowledge & competence gaps by providing 100% FREE Supply Chain and Tech courses
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One thing I have found helpful is to regularly review delivery metrics and service level agreements with carriers. This provides visibility into whether targets for on-time delivery and cost are being met. If there are gaps, I work collaboratively with carriers to understand what issues they face and how processes can be improved. I focus on developing win-win relationships rather than a punitive approach so that carriers are motivated to resolve problems. This proactive performance management and two-way communication build resilience to adapt to changing market conditions that could impact transportation budgets and schedules. The goal is to keep partnerships productive to ensure timely customer deliveries within budget.

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6 Review and improve your carrier performance management

The sixth and final step is to review and improve your carrier performance management process and practices. This means evaluating the effectiveness and efficiency of your carrier performance management system and activities, and identifying the areas and aspects that need improvement. It also means implementing the improvement actions and initiatives, and measuring their impact and results. You should review and improve your carrier performance management in a continuous, systematic, and data-driven way, and involve your carriers and internal stakeholders in the process. By reviewing and improving your carrier performance management, you can ensure your transportation performance is always optimal and aligned with your business goals and customer needs.

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Kingsley Ukpai .M.

I help businesses develop and deploy Supply Chain & Operations Strategies that aid in attaining Organizational goals || I also help bridge knowledge & competence gaps by providing 100% FREE Supply Chain and Tech courses
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One thing I have found helpful is to conduct quarterly business reviews with key carriers. This provides an open forum to analyze performance trends together, highlight successes and challenges, and brainstorm process enhancements. For example, we may identify an opportunity to implement more automation for scheduling and status updates to reduce manual work and improve data accuracy on both sides. Or we might agree to new reporting cadences to tighten the feedback loop. Taking time to step back and examine the carrier management program yields fresh ideas for improvement. And involving carriers directly in the process increases buy-in for any changes since they help shape them.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Kingsley Ukpai .M.

I help businesses develop and deploy Supply Chain & Operations Strategies that aid in attaining Organizational goals || I also help bridge knowledge & competence gaps by providing 100% FREE Supply Chain and Tech courses
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Building trust and communication has been essential. During weather events or other disruptions, suppliers often have better visibility than we do into potential impacts. Encouraging them to proactively share updates rather than await our inquiries has minimized surprises. And when issues arise, understanding the context and impediments suppliers face helps inform practical solutions vs. assumptions. I’ve found trying to over optimize key metrics like on-time performance can backfire by omitting useful exceptions. For example, a storm delay might still ultimately meet the delivery deadline given shipment complexity. Accommodating reasonable flexibilities acknowledges operating realities while still upholding standards.

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How can you effectively manage carrier performance and ensure on-time, on-budget delivery?

1

2

3

4

5

6

7

1 Define clear expectations and standards

2 Track and measure carrier performance

3 Provide feedback and recognition

4 Collaborate and innovate with your carriers

5 Monitor and adapt to changing conditions

6 Review and improve your carrier performance management

7 Here’s what else to consider

Logistics Management

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How can you effectively manage carrier performance and ensure on-time, on-budget delivery?

1

2

3

4

5

6

7

1 Define clear expectations and standards

2 Track and measure carrier performance

3 Provide feedback and recognition

4 Collaborate and innovate with your carriers

5 Monitor and adapt to changing conditions

6 Review and improve your carrier performance management

7 Here’s what else to consider

Logistics Management

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