Selecting a transportation supplier (TSP) is not complicated, but it is more involved than just which company has the lowest price. When it comes to selecting a TSP, many companies just go with whoever has the lowest price with little to no due diligence other than requesting the TSP’s Authority and Insurance. In theory, this should be enough, however, in reality you are just one shipment away from the worst experience of your life.
Don’t do business with just anyone, it’s important to know your carrier/broker/3PL.
Here are a few examples of what can go wrong:
- Theft of your cargo
- Not being able to get your cargo claims paid
- Having to pay for the shipping costs multiple times (fraud)
- Having to settle a multi-million dollar negligent hiring suit
The selection of a supplier has to start with minimum criteria/standards that you will accept. These criteria’s/standards should be documented into a carrier/broker/3PL selection framework. This Framework should detail the standards for selection, fraud prevention, and illegal activity prevention (I.E. brokering without a brokers authority), as well as a time table to review for each TSP. Furthermore, you should have a Master Service Agreement (MSA) with each TSP that you use, detailing how you will do business and your expectations.
Examples of Criteria/Standards:
- Do you or does your 3PL/broker investigate the carriers they are using by calling references and checking their background?
- Is your TSP operating legally with an active authority?
- Is your TSP brokering out your shipments without a brokers authority?
- Are you or is your 3PL/broker checking the carrier’s cargo insurance with the insurance company they are using to make sure the carrier has it and it is valid?
- Are you or is your 3PL/broker checking the safety rating of the carrier?
- Are you checking to make sure the carrier name on the side of the driver’s door matches the company you contracted?
If you or your TSP are not following this criteria, you could be facing a catastrophic incident which at minimum will result in paying freight charges twice, all the way up to settling a multi-million dollar lawsuit. At the Kenneth Clark Company, we double check all of these standards with each and every carrier we use, so you get the best service possible. We have set MSA’s, preventative measures for fraud and illegal activity, and we make sure the carriers we use are up to these standards. Let us take care of all of this, so that you don’t have to.