A Carrier Procurement Strategy Guide for Service, Cost, and Sustainability

A robust carrier procurement strategy is foundational to a resilient and efficient supply chain. Many procurement leaders believe they must sacrifice service levels or sustainability targets to achieve cost savings. However, a strategic approach to carrier procurement allows you to enhance service, reduce costs, and advance your sustainability goals simultaneously.

Executing a carrier procurement strategy that aligns with multiple objectives requires a plan that accounts for carrier capabilities and your organization’s unique operational needs. Achieving this balance enhances your competitive advantage. Data is the cornerstone of this strategy, empowering informed decision-making and optimizing transportation network performance.

This guide provides a step-by-step framework for developing a successful carrier procurement process.

1. Define your goals and priorities

Before sending requests for information (RFIs), it's essential to have a comprehensive carrier procurement strategy that aligns with your service, cost, and sustainability goals. Contrary to popular belief, you don't have to compromise one network priority for another. With the right technology and approach, you can achieve a balance that satisfies your company’s broader logistics and business objectives.

Within this step, it's also vital to evaluate your current carrier partnerships.

• Reward incumbents: Identify and reward carriers that consistently meet your performance expectations and remain competitive.
• Evaluate new partners: When considering new carriers, determine if an asset-based or broker is the right fit. Asset-based carriers often provide greater reliability and control, which is increasingly important amid rising security concerns. Brokers can offer flexibility and cost advantages.

Adopt a data-driven approach by viewing crash and incident performance, safety, and compliance metrics. Use freight benchmarking to see how your carriers stack up against peers, which will inform your procurement decisions.

2. Balance cost, service, and sustainability needs 

Navigating the trade-offs between cost, service, and sustainability is a common challenge in carrier procurement. You can master this balance by integrating sustainability criteria directly into your RFP process. 

• Analyze your lanes: Examine lanes with alternative fuel infrastructure. 

• Request alternative energy bids: Encourage carriers to submit bids for both traditional diesel and alternative energy options on relevant lanes. 

• Inquire about sustainability initiatives: Ask carriers for their SmartWay scores and details on their current or planned emissions reduction efforts. 

This approach provides clear insight into a carrier's commitment to sustainability, which you can evaluate alongside their linehaul rates and service metrics. By making sustainability a core component of freight procurement, you hold carriers accountable and support your own organization's emissions reduction goals. 

3. Cultivate strong carrier partnerships 

Improve your carrier procurement process from a simple transaction into a strategic partnership. Building meaningful relationships built on transparency is key. When you treat carriers as essential stakeholders in your transportation network, you can unlock cost savings, improve service, and find collaborative sustainability opportunities. Shippers who fail to nurture these relationships often find themselves most vulnerable during market disruptions. 

• Maintain open communication: Conduct regular check-ins and performance reviews to proactively address concerns and drive continuous improvement. 

• Leverage data in conversations: Use technology and data-driven insights to foster productive discussions and respond effectively to dynamic market conditions. 

By focusing on partnership, you can create a resilient transportation network that is agile and aligned with your long-term business objectives. 

Step 4: Execute and monitor post-RFP 

The actions you take after finalizing your RFP are critical to achieving your goals. To effectively implement your new strategy, pair your RFP results with compliance and performance monitoring tools. 

A solution like Network Intelligence is essential for this stage. It provides ongoing, actionable recommendations to ensure your network remains optimized and performs according to plan. This allows you to proactively address deviations and navigate market disruptions, ensuring your transportation network continuously aligns with your business goals. 

To explore how Sara Lee Frozen Bakery leverages Network Intelligence within their transportation network, read their success story or watch the video below. 

Another powerful solution to help you stay aligned with your transportation budget is T-Fuel. Designed to provide budget certainty, T-Fuel can help reduce the effects of fuel market volatility through locking in a fixed price for the fuel consumed while moving your products to market. Shippers can establish the fixed price anywhere from one to thirty months in advance of the lane movement, enabling peace of mind, even in the face of geopolitical tensions, shifting policies, and fluctuating supply and demand. 

Optimize carrier procurement for operational excellence and sustainability

A winning carrier procurement strategy requires a comprehensive approach that balances service, cost, and sustainability objectives. By setting clear goals, cultivating strong partnerships, and using data-driven insights, you can optimize your transportation network for both immediate and long-term success.  

Tools like Network Intelligence further enhance your freight procurement strategy by providing the actionable metrics and recommendations needed for continuous improvement. With this holistic approach, your organization can effectively navigate the market while aligning your transportation network with your most important business objectives.