The Hidden Danger of Selecting the Lowest Cost Carrier

time-quality-moneyIt feels great to save money, doesn’t it? There are TV shows dedicated to couponing and budget hacks as we work harder to stretch a buck. As consumers, it never fails to thrill us when our favorite brand of diapers or coffee creamer goes on sale. When we go to work, we are driven to save the company money either in the cost of printer ink, office space, advertising, and even phone service! For many shippers and manufacturers, not a day goes by without feeling added pressure from their own customers to lower their price, and in order to stay competitive, the temptation is to constantly put their loads out for bid to a large distribution list of carriers and brokers. After filtering through the responses, you finally find a provider that is lower than the rest of the pack, and even if it’s $20, it feels like a small victory! Your victory can be short-lived once your product is on the truck and things happen that add additional costs. Have you ever heard the line about paying peanuts and getting monkeys? In hindsight, it’s often cheaper long-term to use the provider that may be a few bucks higher, but will help you avoid the danger of extra costs such as these:

  • Loading Delays:
    The cheapest carrier (or provider) gave you an amazing price! However, they underbid! Their next available truck isn’t until next week, and it’s going to cost more once they begin backtracking on their quote. Meanwhile, it’s stuck on your dock and your warehouse has to work around it, wasting time, and clogging precious space.
  • Hidden Charges:
    Maybe the load itself goes off without a hitch, they pick up and deliver on time, but when you receive the invoice you notice the price they quoted didn’t include fuel even though you asked for a price “all-inclusive”. Perhaps they add a lift-gate, appointment, or detention fees that you didn’t approve in advance. This is a tactic employed by many providers, quoting low only to gouge you later on extra charges, or accessorials.
  • Customer Loss:
    Whether it’s a new customer you are shipping to or a customer that orders once in a blue moon, you’re only as good as your last service experience. The carrier/provider you select is viewed by your customer as an extension of your company, and therefore, poor service or a bad attitude can negatively influence their opinion of you! Low cost can often equal impatient drivers stressed to make it to their next stop quickly and being excessively rude and aggressive with your customer to get loaded or unloaded quickly. Is it worth it in the end if you lose that customer?
  • Production Delays:
    If the product you’re shipping is part of a just-in-time manufacturing set up, the selection of a solid provider is even more important. Low cost carriers may view your freight on a lower level as their core customer “gravy” business, therefore getting pushed to the back of their list of deliveries. If your customer’s production line is held up waiting on it, who’s really benefiting from the lower cost of that provider? Certainly not you!

For reliable service from a trusted provider you can count on, contact Hybrid Logistics. We have nationwide offices to serve you, and will work with you to increase capacity in lanes within price points that not only provide great service but also the cost structures you need to avoid price creep.

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