Building long-term relationships in logistics: a shipper’s perspective

CHICAGO – The trucking industry continues to evolve, with new regulations and operating models emerging as well as recent challenges such as the COVID pandemic and the prolonged downturn in trucking. But one thing hasn’t changed: customer needs, explained Lynn Olson, senior director of supply chain and logistics for national women’s apparel retailer Maurices.

Speaking from a shipper perspective at a Carrier Logistics Inc. user conference, Olson noted that when she began her logistics career 30 years ago, TMS was a carrier-developed prototype and Microsoft Windows was new.

“Everything is now automated, AI-driven, with driverless vehicles, tractor placement, customer service chatbots, and we can all manage driver performance without having paper logs anymore,” she said. “But what hasn’t changed for me, the customer, is that we still want everything we ever wanted, but we want it faster and cheaper.

“It comes down to three things: Can you meet my needs? Is the price for the service correct? And do you provide the technology needed and expected for such services?”

While everyone knows that the supply chain is built on relationships, those relationships have become more difficult to develop as traditional networks at local transportation club meetings have been largely replaced by Internet-enabled communication networks. But relationships are still critical, Olson continued.

“Meeting your client where they are is how you help the relationship take root and grow into a long-term partnership,” she said.

For Olson, service, price and technology are the three pillars of a successful partnership, and “if one of them is weak, the whole chair becomes unstable; Getting the balance right is critical.”

What does the client need?

The service aspect is based on the operator’s understanding of the customer’s needs and the willingness and ability to tailor the service to meet those needs, rather than on the expectation that the customer will adapt to the service offered. Of course, it can be difficult to understand what a potential client is actually looking for, but any sales proposal should at least demonstrate some effort to find out before the first phone call or email.

“Asking a client to meet and say, ‘Tell me about your company,’ is frustrating,” she said. “Basically, what this tells me is that you did little or no work to find out who I was or who my company was before you walked in the door.”

To complicate matters, sometimes the client (or the person taking the first phone call) may not know what they need or cannot explain it. This is where communication and “real listening” come in.

“Get the customer talking; help them solve problems with you,” Olson said. “This creates a great foundation for your relationship and introduces them to your services and your industry without making them feel—for lack of a better word—stupid. This is basic critical thinking, a skill that not everyone has but is worth learning on both sides of the relationship.

“The way you interact with your customers is as important as the service you provide. Building trust through respect and patient engagement can create loyalty that will last for years to come.”

Additionally, Olson noted that early in her career there were very few women working in logistics, but she still experiences inappropriate comments.

“I’ve seen it and heard it all, and it doesn’t get you any closer to communicating with your client or makes your statement sweet,” she said emphatically. “It’s just disrespectful.”

Case studies can be a good way to show a customer how a carrier has solved similar problems for other customers, but make sure the case studies are to the point.

“Selling a customer something they don’t need doesn’t excite anyone,” Olson said.

See also: Carrier Logistics Expands Air Freight Customer Base with Eagle Air Freight Presence

Calculate the price

Once the carrier understands the customer’s needs and offers services that meet them, the discussion can move to pricing.

“Pricing is, without a doubt, always a factor and that’s important. Clients have a budget,” Olson said. “But it’s also important to understand that customers aren’t just looking for the cheapest option. What we really need is value and quality of service that justifies the price we pay.”

Indeed, prices that are too low make her “a little skeptical” and can often lead to lower productivity and “hidden costs down the road,” she added.

And pricing should be transparent; partners need to clearly articulate the value they bring.

“If your rates are high because you offer superior on-time work or dedicated customer support, make that clear,” Olson said. “Explain why it’s worth paying a little more for the peace of mind that comes with reliable, high-quality service, but explain how it relates to the customer’s business. Don’t just give them the marketing line presented on the slides.”

Carriers should not be shy about asking customers how they feel about the pricing levels being discussed, as this is another opportunity to ensure that needs and services are matched.

“Be direct. Be confident. Get the dialogue moving,” she added. “Here’s the key takeaway: Customers don’t just look at price tags. They estimate the total cost of ownership; this includes service reliability, potential efficiency savings and overall supply chain impact.

“Help them count. General ROI numbers are good, but they are usually imprecise. Collaborate with the client to understand the impact on their end. If you can, get real data, not just guesswork.”

However, sometimes the price simply does not fit the client’s budget.

“My biggest piece of advice is know when to walk away, but don’t walk away forever,” Olson said. “You really have the right service. You know that your offer provides value to this customer. Keep in touch. Leave with a smile and kindness and agree on when you should check in next. Everything is constantly changing.”

Make sure the technology is right

Technology has become critical to today’s organizational landscape and is no longer a “nice extra,” as Olson explained her third leg in the stool.

“As a customer, I need to see what is happening with my shipments in real time. I need the correct account. I want data analytics and systems that integrate seamlessly with our operations,” she said. “But often there are bells and whistles that are not needed. Be aware of this and do not impose something that is not important to the client. I can’t tell you how many times someone has presented a technological improvement, and it doesn’t really apply to my business, but they keep talking about it because that’s what they were going to sell today. Don’t do this. This is a great way to show the client that you are not listening.”

However, if the carrier representative has been attentive and understands the customer’s needs, he or she should “pull back” and explain why the technology is important.

The “biggest and most disappointing” aspect of the technology is that the new tool is plug-and-play, but the integration is much more complex than advertised.

“Stop saying that. Never, never in my career have I had rapid integration between systems,” Olson said. “Be reasonable in your promises. You can talk about easier integration, but the only thing that slows down such projects is Every company has its own internal IT teams. The client’s project is their priority, not the IT team’s priority, and in most cases is not a business priority.

“The list of projects for him is endless, and there are never enough dollars. Offer to talk to your client’s IT departments. Develop a fair and realistic integration plan; offer value for integration.”

Olson also noted that the LTL industry is “notorious” for billing errors that take forever to correct.

“I understand that there are uneducated shippers who do not know how to complete a basic bill of lading or do not understand the difference between prepaid collection and third party billing and why it is important for BOL to have this authority,” Olson said. “But tell me, why, once this information is sorted out, does it take months and months to bring the charge back to someone else? Not to mention the calls and letters threatening your firstborn if you don’t pay them.”

Additionally, Olson doesn’t understand why—given the capabilities of modern telematics and tracking technology—some carriers are still unable to provide real-time delivery updates.

Finally, linking technology to pricing, Olson suggested that reporting is one area where she uncovers hidden costs in the sales cycle.

“Customers need to know what is included and what they have to pay for in terms of reporting and transparency,” she said. “Personally, it burned me, partly because I wrote my own rule and didn’t ask follow-up questions, but over time it became a problem and ended the relationship with the 3PL.”

Technology is more than just bells and whistles, Olson emphasized. Rather, it is about providing “basic visibility, control and efficiency.”

“It’s about providing connectivity from the customer to the carriers and from the customer to their customer,” she said. “It can be simple or complex, depending on the specific client. Carriers that leverage technology can offer superior service that differentiates them from a crowded industry.”

A strong relationship is a win/win

Olson concluded by explaining that shippers work too hard to get a carrier to participate in short-term offers, and carriers should not even offer a trial run.

“Building long-lasting, strong relationships requires patience, honesty and a commitment to mutual success,” she said. “It’s not just about closing the sale; it’s about creating partnerships that will stand the test of time. It’s about building relationships based on trust, responsiveness and a shared commitment to success.

“Surprisingly, the situation has not changed in 30 years.”