---
title: How to Evaluate Managed Transportation Providers | ShipperGuide
description: Use this checklist to evaluate managed transportation provider options on technology, team, pricing, KPIs, and speed.
image: https://blog.loadsmart.com/hubfs/BLOG%2005%20%E2%80%94%20How%20to%20Evaluate%20Managed%20Transportation%20Providers.png
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# How to Evaluate Managed Transportation Providers

 by [**Sarah Fidrych**](https://blog.loadsmart.com/author/sarah-fidrych)

**Key Takeaways**

- Whenever you outsource your entire logistics and operations...
- Successful managed transportation providers employ technology to...
- A dedicated team model with named support members helps guarantee...
- In your managed transportation provider checklist, it is essential...

Choosing [managed transportation](https://loadsmart.com/shipper/managed-transportation/) provider options becomes costly if the wrong choice is made and a big task to turnover lots of data. Choosing a dedicated team with a robust tech stack will help. Selecting a pricing model and set of KPIs that aligns with your company will also set you for success.

Read on to learn how to evaluate managed transportation provider options and use this article as a managed transportation provider checklist to make the best choice.

## Why Provider Evaluation Matters

Whenever you outsource your entire logistics and operations planning and execution, it is imperative to evaluate the strengths, observe the weaknesses, and learn how your managed transportation provider accommodates them. You want your investment to bring the most value, so select a 4PL with strong technology and proven delivered savings.

### The Cost of Choosing the Wrong Partner

The act of choosing managed transportation provider options incorrectly will cost you financially and structurally. You need to supply a managed transportation provider with historical data. If you choose the wrong option, you open your entire operations up to a company that may not benefit you.

Gaining true value assessments takes weeks. Without going through the managed transportation provider checklist, you slow up the time you will see results.

## Technology and Platform Capabilities

Successful managed transportation providers employ technology to determine and execute savings for your company. By selecting a managed transportation provider with an evolved tech stack, you eliminate the need to invest in technology by 100%.

### TMS, YMS, Analytics, AI, and Integration Requirements

A proprietary transportation management system (TMS), yard management system (YMS) and AI enhanced analytics are key indicators of a full tech stack. Deep integration is helpful because it allows for reporting and customization tailored to your organization. It allows you to continue using your existing software without needing to adjust.

## Team Expertise and Dedicated Support

A dedicated team model with named support members helps guarantee optimization will be handled effectively. Some managed transportation providers pull from a pool of service representatives. Including specific, experienced logistics service delivery teams and engineering, analytics, and data professionals is a green flag when you set out to evaluate managed transportation provider options.

### Industry Experience, Forward-Deployed Models, Planning Center of Excellence

Managed transportation providers with genuine experience in your industry offer a significant advantage. When choosing a managed transportation provider, look for proven transportation management processes and established carrier sourcing and management capabilities.

Forward-deployed models work because they locate inventory closer to their end destination. The Planning Center of Excellence (CoE) acts as a hub for the operation of the three pillars: people, process, and technology. These both work to expertly work on strategic planning and network enhancement.

## Carrier Network and Market Coverage

In your managed transportation provider checklist, it is essential to consider the carrier network of your provider. They will handle all communications and connections with carriers. Confirming they cover your service area and can reach your customer base helps reduce delays.

### Network Depth, Mode Coverage, and Capacity Guarantees

When relying on an outsourced logistics team, it is good to ensure they work with a variety of carriers within your market. Shallow relationships limit growth. Multi-modal coverage is useful for shippers operating in more complex networks. Capacity guarantees help ensure demand is met regardless of season.

## Pricing Transparency and Performance Guarantees

Your managed transportation selection criteria should include transparent pricing. A strong provider will run a free assessment to help get you started.

Performance guarantees also give confidence in knowing that your prospective managed transportation provider has enough previous success to offer a guarantee.

### Fixed ACV vs. the Percentage of Freight Spend, SLAs, and Savings Commitments

One common pricing model is fixed annual contract values (ACV). An ACV is a flat fee due monthly or yearly.

The percentage of freight spend is a variable pricing model which fluctuates based on a determined percentage of shipments.

Service level agreements (SLAs) are custom contracts that agree on specific KPIs of primary focus to reduce costs and time by having a goal.

Savings commitments are promises to realize a certain amount of savings through mode or capacity optimization and carrier rate reductions.

## Contractual KPI Commitments: The Non-Negotiable

Key Performance Indicators (KPIs) are among the managed transportation selection criteria you should never compromise on. When written into the contract, your managed transportation provider commits to delivering results against defined thresholds. This is part of your guarantee.

Specific KPIs to look out for include: freight cost reduction, tender acceptance, OTIF, and invoice auto-approval. The consequence clause should specify the numeric benchmark to reach, the timeframe for measurement, and the compensation owed if benchmarks are missed.

## Implementation Speed and Change Management

The speed at which your managed transportation provider operates should be another of your many selection criteria. This helps you move in weeks and months instead of years.

Change management is built on awareness, desire, knowledge, ability, and reinforcement. A team that operates with this mindset is one focused on evolving. Staying stagnant does not move you or them forward, so movers in this field, move to the front.

## Evaluation Criteria for Enterprise Shippers

There are specific criteria to consider for Enterprise Shippers evaluating managed transportation provider options.

### Minimum Account Size

Choose a managed transportation provider that operates with a minimum account size that aligns with you. Too little data or too much data will not help the problems in your arena.

### Speed to Value vs. Enterprise Timelines

Speed to value is geared towards quickening outcomes. This is different to enterprise timelines that approach your optimization more methodically and calculated. You will discuss with your provider what your ultimate goals are here.

### Right-sized Technology

Choosing a managed transportation option with right-sized technology ensures you gain appropriate visibility for your operation. A TMS and YMS built for Enterprise Shippers should support growth and multi-modal complexity without being so over-built that it slows down real savings.

### Dedicated-Team Commitment

A dedicated team committed to your outsourced logistics is not a nice-to-have, but a requirement. Look for companies that assign dedicated logistics professionals to your account.

## Score Your Next Managed Transportation Provider With Confidence

With this managed transportation provider checklist and a free Loadsmart Transportation Savings Assessment available to you, selecting your next provider becomes a confident, structured decision. [Schedule your free Transportation Savings Assessment](https://lp.loadsmart.com/en/free-transportation-savings-assessment) today to start evaluating Loadsmart against your managed transportation provider checklist.

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## Frequently Asked Questions

### What Are the Biggest Red Flags When Selecting a Managed Transportation Provider?

Red flags include providers who cannot clearly explain how they manage, plan, or procure transportation, fragmented technology stacks, and a lack of proven case studies.

### Should I Choose an Asset-Based or Non-Asset Managed Transportation Provider?

As long as your provider has strong carrier relationships, non-asset-based providers are equally effective. If they lack proper network connections, an asset-based provider will likely provide a smoother experience.

### How Many Providers Should I Evaluate in an RFP?

You should not need to evaluate an excessive amount. A short list of 3 to 5 providers gives a good range for comparison.

### What Contractual KPIs Are Realistic to Ask For?

Reasonable contractual KPIs include freight cost reduction, carrier rate reduction, technology investment reduction, headcount reduction, freight audit savings, tender acceptance, OTIF, and invoice auto-approval.

Topics: [Managed Transportation](https://blog.loadsmart.com/tag/managed-transportation)

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