Share this
Dedicated Drop – How a Modern Broker Can Fill the Gaps for CPG Companies
All Consumer Packaged Goods (CPG) companies navigate a competitive marketplace, with the most successful figuring out a long time ago that a well-run supply chain is the key. This has never been truer than today because the pressure to drive better margins and execute near-flawless delivery performance in the face of sky-high customer demand is what’s required.
The pressure felt from expectations of a seamless retail experience is placed squarely on the shoulders of every CPG brand’s transportation team. Some good news is that the logistics function is use to the pressure since most CPG supply chains have grown to meet constantly increasing requirements over time. Companies know that the ability to execute an efficient and high-performing supply chain is directly tied to its sales growth and profitability.
A common and effective strategy to provide that level of execution is using dedicated drop and hook networks. When leveraged correctly, such networks lead to advantages, including less production downtime and dock congestion, along with better employee utilization and on-time delivery performance. These benefits have led to the growth in popularity and reliance on drop and hook in the CPG industry. Yet, while companies already understand this, most don’t realize there’s room for improvement.
The missed opportunity lies in a misconception about constructing the best drop and hook network and how that limits its effectiveness. Many companies miss the potential of what drop and hook can do for them due to preconceived ideas about the right types of transportation partners to rely on.
How do most shippers build and manage their drop network?
Shippers have traditionally leaned on asset-based carriers to help manage their drop networks. This default choice is based on the idea that working directly with carriers that own the transportation assets will make it easier to control the complex coordination of equipment that is required. This assumption is understandable because a lot of communication is required between the facilities and carriers. However, this approach creates limitations shippers may not be aware of.
The disadvantages of relying solely on asset-based carriers
Traditionally, a drop-and-hook arrangement that meets the needs of most CPG companies will require a network of multiple asset-based carriers and include different agreements with all of the individual carriers. The time it takes to find and qualify partners and the expense of maintaining all the different relationships is more than many companies can manage. For those attempting to, unforeseen complications prevent them from realizing the significant benefits drop trailers can offer.
The one option CPG companies often overlook because it’s not a traditional approach is leveraging a digital broker's many strengths. Brokers increase shippers’ flexibility in the day-to-day because there are times that even the largest carriers do not have power or trailers to get equipment where the shipper needs it. With no equipment, there is no drop network. However, qualified brokers have expansive carrier portfolios greater than any CPG company's own.
What are some of the common misconceptions and concerns with brokers?
Many companies think brokers are often the best choice for spot moves but not for steady, consistent lanes. The latter is not always the case, although it’s fair to feel that a facility facing a constant flow of new carriers that are inexperienced with its freight might impact service. Or that not physically having control over its ‘own’ equipment might mean loads will go uncovered by a broker.
Four ways brokers fill the gaps in a CPG drop and hook network
- Access to Capacity. Modern brokers operate an extensive and vetted portfolio of carriers that ensure drop capacity, whether the need is to create a regional or national carrier network.
- Adaptability. A broker can help a shipper expand or adjust a drop and hook network when an asset-based carrier cannot. Brokers also enable a company to quickly modify its network without a new RFP as origins and consignees change.
- Smooth the Peaks. Brokers can vet and manage multiple carriers when volume spikes during peak times on high-volume lanes.
- Centralized Management – Brokers are a centralized contact for the customer to use for information, reporting, and issue resolution for anything in its drop trailer program.
Creating a better drop and hook network
Embracing a digital broker like Loadsmart as a better option for managing a dedicated drop trailer network requires different thinking. But there is a reason the new approach is an emerging trend for CPG companies. As a partner, Loadsmart will help build your network, preventing you from having to directly vet, manage, and communicate with many asset-based carriers.
The benefits of a drop network come more quickly with a broker partner while having a single point of contact simplifies communication for your logistics operation. Thanks to Loadsmart’s ability to build a complete drop trailer program through its network of carrier relationships, CPG shippers not only get access to carriers they couldn’t on their own, but they also benefit from continuity of knowledge about their business and the many common consignees many large CPG companies regularly deliver to.
Visit loadsmart.com to learn how to get started.
Share this
- Blog (87)
- Market Trends (83)
- Shipper (83)
- Enterprise Shipper (68)
- Carrier (66)
- News (56)
- Data Insights (50)
- Thought Leadership (43)
- SMB Shipper (38)
- Our Partners (34)
- Product Updates (29)
- Warehouse (28)
- Mode Optimization (25)
- ShipperGuide TMS (22)
- Mid-Market Shipper (17)
- Opendock (14)
- Case Study (11)
- Loadsmart (11)
- Brokerage Services (10)
- Managed Transportation (7)
- Video (7)
- FreightIntel AI (5)
- Instant Execution (4)
- Asset (3)
- Award (3)
- Food and Beverage (3)
- Freight Management (3)
- eBook (3)
- Podcast (2)
- Logistics Solutions (1)
- Paper Packaging (1)
- Retail (1)
- Transportation Management System (1)
- October 2024 (3)
- September 2024 (11)
- August 2024 (5)
- July 2024 (5)
- June 2024 (9)
- May 2024 (7)
- April 2024 (6)
- March 2024 (2)
- February 2024 (2)
- January 2024 (5)
- December 2023 (6)
- November 2023 (2)
- October 2023 (12)
- September 2023 (5)
- August 2023 (3)
- July 2023 (4)
- June 2023 (10)
- May 2023 (5)
- April 2023 (5)
- March 2023 (7)
- February 2023 (5)
- January 2023 (7)
- December 2022 (4)
- November 2022 (13)
- October 2022 (4)
- September 2022 (7)
- August 2022 (11)
- July 2022 (6)
- June 2022 (5)
- May 2022 (2)
- April 2022 (4)
- March 2022 (6)
- February 2022 (7)
- January 2022 (9)
- December 2021 (3)
- November 2021 (5)
- October 2021 (7)
- September 2021 (2)
- August 2021 (2)
- July 2021 (4)
- June 2021 (6)
- May 2021 (6)
- April 2021 (5)
- March 2021 (8)
- February 2021 (3)
- January 2021 (3)
- December 2020 (7)
- November 2020 (9)
- October 2020 (7)
- September 2020 (6)
- August 2020 (10)
- July 2020 (8)
- June 2020 (3)
- May 2020 (1)
- April 2020 (2)
- March 2020 (2)
- February 2020 (1)
- January 2020 (1)
- November 2019 (2)
- October 2019 (1)
- September 2019 (2)
- August 2019 (3)
- July 2019 (2)
- June 2019 (2)
- May 2019 (3)
- March 2019 (1)
- February 2019 (3)
- December 2018 (1)
- November 2018 (2)
- October 2018 (1)
- September 2018 (2)
- August 2018 (1)
- July 2018 (1)
- June 2018 (3)
- May 2018 (4)
- April 2018 (1)
- February 2018 (1)
- January 2018 (4)
- November 2017 (1)
- October 2017 (2)
- June 2017 (1)
- May 2017 (2)
- April 2017 (1)
- February 2017 (1)
- January 2017 (2)
- October 2016 (1)
- August 2016 (1)
- July 2016 (2)
- June 2016 (1)
- March 2016 (1)
- January 2016 (1)
- December 2015 (3)
- November 2015 (2)
- October 2015 (6)
- July 2015 (1)
- June 2015 (1)
- April 2015 (2)
- March 2015 (13)
- February 2015 (17)
- January 2015 (15)
- December 2014 (35)
- November 2014 (26)
- October 2014 (60)
- September 2014 (2)