Contract Shipping: A More Stable Supply Chain

When most companies consider their shipping needs, their first thought is likely to contact a freight broker who will in turn search for a carrier on a freight board that is capable of handling their shipment. A price will be reached by all parties and the shipment will be coordinated most likely by the carrier. Yet while this arrangement has its place, there are times when shippers begin to realize the pitfalls of this arrangement.

For one, there is little oversight when a shipper utilizes the spot market for their transportation needs. The broker is bonded, which does add a layer of protection, however there is no accountability in the event the customer receives poor service in the form of a late delivery or worse, broken freight. Spot market rates are also highly variable, which can wreak havoc on company budgets, along with uncertainty surrounding capacity, which is what many companies faced a few years ago. Most importantly, the spot market arrangement doesn’t provide a high level of service. It is a transaction and offers little chance of building a relationship with your carrier and developing a more strategic supply chain.

A useful alternative is contract shipping. A contract with a carrier states the terms such as pricing and capacity for a set duration, most often a year. This helps the shipper determine a stable transportation budget that can be accounted for. A contract also requires that both companies work together in order to find a win-win solution while also making the carrier accountable to the shipper directly, rather than an intermediary. This allows you to create measurable KPIs for the sake of building a stronger supply chain.

The final benefit of contract shipping is the dedication to service you’ll receive. A carrier has a stronger incentive to work with you and provide you with better service that you can count on. The carrier will also learn your shipment patterns and can develop new methods of creating a better shipping experience for you in the long run. Contract shipping is about taking the long-term view of supply chain strategy instead of settling for cut-rate service on an individual shipment.

Here at Zip Xpress, we understand the importance of creating a stable supply chain. That’s why when you work with us, we’ll provide you with the best service in the industry and do whatever it takes to get your shipment to its destination on time and undamaged. There are no surprises when it comes to working with us, just custom carrier solutions that will help you grow your business and a company that cares about your success. It’s why we’ve been able to maintain a 99% satisfaction rating with our customers for more than 20 years. To see for yourself, start today with Zip Xpress!