As your freight volumes fluctuate, market dynamics shift, and carrier networks change, it’s important for shippers to know who you can count on. This is where continuous routing guide management becomes a necessity. But first, many companies need to update their perception of what a routing guide is, and more importantly, can be.
Done right, routings guides are not the outdated and inflexible ‘suggested’ set of instructions for choosing carriers they were in the past. A dynamic routing guide serves as the real-time, cost and service optimization tool shippers can use to always make sure the right carrier choice is made for all of the freight they are paying for.
But first, what exactly is a dynamic routing guide, and how do you know if yours is as effective as it can be?
A routing guide is a living document that provides shippers with a list of pre-vetted carriers and their individual characteristics. By breaking down relevant factors like active lanes, freight rates, specific services, volume/weight requirements, and any other necessary carrier information, these guides help shippers easily identify the ideal transportation partner for a particular load.
Routing guides are especially valuable for large or decentralized logistics operations. Given how static, unreliable, and time-consuming it is to manually manage the load matching process entirely in Excel spreadsheets, many routing guides often automatically pull data from today’s advanced transportation management systems. This dynamic approach allows shippers to:
Secure more reliable capacity
Having a carrier listed in your routing guide with a great rate is fine, but that information isn’t worth much if they don’t have available capacity when you actually need it. Since it’s common for market rates to go up and down faster than some routing guides are updated, the ability to find market-appropriate pricing in real time helps ensure you are getting the most accurate prices.
Lower freight costs
Shippers can also use routing guides to compare network-wide carrier rates with average lane rates to verify whether or not a rate is competitive for a specific lane and load, maximizing cost savings. It’s necessary to include additional fees like accessorials and fuel surcharges in your guide, too, because these costs can expose the carriers that aren’t as cheap as they seem.
Improve carrier service levels
When ranking carriers though, shippers should not only consider price, but also service capabilities. By using routing guides to track carrier metrics, such as acceptance rates and average response time, you can figure out which carriers are the most deserving of your repeat business. This can help shippers create and implement new policies to increase carrier compliance as well.
Pro-Tips for Routing Guide Excellence
In order to successfully achieve these benefits, however, you’ll need a mechanism to ensure your routing guide is based on current and accurate information. Carrier rates and other variables are constantly shifting, so routing guides should be able to reflect this. Shippers should also focus on the shipments that stray outside of their expectations. While there could be valid reasons for these exceptions, larger providers managing hundreds or even thousands of shipments each month could lose a lot of money by not paying closer attention.
Failing to add a key attribute could significantly bring down the value of this resource too, so it’s equally critical for shippers to double-check that all relevant details are sufficiently covered within their routing guides.
Click here to learn more about how Loadsmart can help you fine-tune your routing guides and increase your company’s confidence in its carrier selection processes.
We are industry veterans and data-scientists using innovative technology to fearlessly reinvent the future of freight. As the ‘nerds of logistics’, we seek intelligence in data to solve deep-rooted inefficiencies in the industry. We give shippers, brokers and carriers access to our data connections (linking supply and demand) and suite of award-winning solutions to strike the perfect balance of cost and service. We’re creating a more efficient and environmentally responsible way to move more with less. For more information, please visit: https://loadsmart.com