4 Reasons Why It’s Important to Choose Inland Logistics Services Carefully

If there’s one lesson we can take away from the recent worldwide crunch, it’s this: As business owners, we cannot afford to overlook our logistics service providers.

Out-of-stock goods can have a sizable impact on any business. When a customer wants to purchase an item and finds it is out of stock, their trust in the brand drops. Even more importantly, stockouts equate to lost revenue. In fact, a 2018 study by the IHL Group found retailers in North America missed out on $144.9 billion in revenue because of out-of-stock items.

With all of this in mind, it’s clear you should choose your inland transportation service providers carefully. And, stockouts are only a part of it. Here are a few reasons why you should do your due diligence when evaluating transportation service providers.

1. You need a provider capable of scaling with your business

For small business owners, there is nothing more satisfying than watching their company grow. But growth can also lead to new challenges for vendors.

First and foremost, you need to consider your current product line and future product line extensions. If you anticipate needing to eventually transport cargo that is flammable, perishable, or hazardous, you need a vendor willing and able to do so. It’s even more critical to determine if they can handle international cargo shipping if you plan to eventually ship worldwide.

Next, you need to know whether they will be able to handle your inquiries and quickly address problems—not only now, while your business is small, but also later on down the road when your business grows and the number of shipments you make in a given year increases significantly.

Before making a decision on a vendor, make sure both you and your team are confident they will be able to meet your needs now and into the future.

2. Not all providers are digitally integrated
Technology is so prevalent in our lives that we often take it for granted. But not all firms are fully integrated digitally.

In the modern business environment, delayed reporting from a vendor on the location of a product you’re shipping can be the difference between long term success and failure. You should be able to track where your shipments are at any moment and have an idea of when they will arrive without having to make phone calls or send emails. Logistics software makes this possible—that is, of course, if your provider uses it.

Ask potential vendors what software they use. Once you have that information, take it back to your IT team to check whether it can be integrated into your company’s computing systems. If it does and you are satisfied with the software features and capabilities, the vendor may be a match.

3. You need a provider who is there to last

Not all companies are built to last. It’s an unfortunate fact of life in the world of business. While you cannot say for certain whether your logistics provider will be there for the life of your business, you can get a strong sense for how stable they are as a company.

Cycling through transportation vendors can have a destabilizing effect on your business. Over time, your vendors come to understand your company’s needs and will know how to react if something goes awry. So, it should not come as a surprise that a vendor going out of business can harm your company significantly.

As you’re meeting with potential vendors, ask them questions about how they are performing financially. See if they are willing to share financial statements with you. Spend time researching vendors online to find any publicly available information about their finances.

While they may not be willing to reveal everything, you should still be able to achieve some peace of mind that they will be in it for the long haul.

4. A provider could have a mixed safety record

Safety is of utmost importance in shipping. Unsafe transportation and logistics practices can cause physical harm to those involved in an accident as well as reputational harm to your business.

Luckily, researching a vendor’s safety record is one of the simpler steps involved in the evaluation process. Unlike the previous suggestions, company safety records are readily available online through the Federal Motor Carrier Safety Administration. The FMCSA’s evaluation factors incidents such as wrecks, reckless driving, and speeding into their evaluation of a provider.

Spend time on the FMCSA website researching every one of your prospective vendors. If any of their records stand out, you should either eliminate them from your search or be prepared to ask them tough questions during your next meeting. No company can afford partnering with a vendor who is not dedicated to safety.

Shipping is a company’s backbone

Without a strong supply chain management operation, a company cannot function. Partnering with a logistics vendor that is as dedicated to customer service and efficiency as your company is key to a successful present and future.