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Today, the routing guide is King and defines the rules of
engagement between vendors and customers. Now, as logistics processes have come
under more scrutiny, the routing guide must be more detailed, providing a
solution for every shipping situation. Yet, it also must be easy to read,
simple to use and flexible. Your vendors and customers will be more apt to
comply with a guide if nothing is left to their imagination and the carrier’s,
cost savings and route parameters are clearly spelled out.
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Organize your current and future shipments by
origin and destination.
Turn to your company’s vendor and
customer files and identify origin and destination points in your entire
distribution network. You can create something as simple as a state-to-state
matrix or even as complex as a nine-digit zip-to-zip matrix.
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Identify and chart the price /
service capabilities and limitations of each transportation vendor, consistent
with your desired level of service and cost.
Know your carrier’s strengths and weaknesses.
Some carriers are good at transporting perishables; others may provide the
best service, but only to certain locations. Some carriers may provide great
inbound service but less than optimal outbound service. Others may excel
with overnight service; others may have strength in 3 – 5 day service. There
are as many capability variables as there are carriers. Communicate the
possibilities and where to access the best value for every transportation
dollar you spend.
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Identify shipment size (volume and weight),
frequency, modal requirements, special needs and time in transit.
Know the general make up of your
shipments and the variables for time in transit. Identify weight groupings
and service / modal requirements that apply to each group. Typical weight
groups are 1 to 70 or 150lbs, 71 or 150lbs to 5000 lbs, 5001lbs to 12000 lbs
and over 12000 lbs. Service / mode requirements can vary from overnight,
two day, 3 day or 3- 5 day or Air, LTL, Truckload, Rail and Ocean. You may
not want to provide a standard routing for overnight shipments weighing over
5000 lbs, nor would you provide a routing for ocean shipments weighing less
than 70 lbs. Additionally, for shipments under 5000 lbs, you may want an
opportunity to consolidate the shipment with others before it is shipped. Pay
careful attention to your commodity mix and identify susceptibility to damage,
contamination, heat and cold, etc. If some commodities cannot be shipped with
others or require unique handling requirements due to their special nature,
you need to provision for this.
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Identify
consolidation opportunities and weight breaks that support your price /
performance needs.
All too often, shipments are
arranged as they come in from sales or order processing. A basic rule in
transportation is that volume enables volume discounts from carriers. If your
shipments can be consolidated, you will receive better service and rates.
Take a look at your carrier rates. In many cases you will find that one
carrier offers better pricing for shipments of varying weights, one carrier
may offer lower pricing for smaller shipments while another carrier may offer
lower pricing for larger shipments.
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Create
a cross functional matrix that considers all possible variables in Tips 1-4
but keep it simple.
This is a basic “What
If” matrix that leaves the decision-making responsibility with you, where it
belongs. If your vendors are given the flexibility to choose carriers for
you, they will almost always choose a carrier that they prefer, and not
necessarily the one with which you negotiated the best rate or service. Most
freight rate exceptions, most errors in documentation, and most causes for
non-compliance can be associated with a lack of control. It is a difficult
task to identify all possible combinations of circumstance and requirements,
what’s more is that you want to keep your routing guide simple so that your
vendors or other users can easily obtain the information that they are looking
for.
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Create a mechanism for exceptions handling that fit within your current
business processes.
While you strive to provide as much necessary
information to your vendors as possible, there are circumstances for which you
cannot account. So you need a mechanism to provide routing assignments and
rules for those unique shipments that will occur. Create a contact form or
shipment authorization form that can be easily executed by your vendors so
that they can provide you with all of the information that you will need in
order to obtain a carrier that will satisfy your requirements.
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Create rules
Your
rules will identify the general and specific rules of engagement for
conducting business with your company and should identify anything that is
necessary to maintain or improve the efficiency of your receiving, put away,
inventory and accounts payable and receivable processes. Identify
requirements for marking, labeling, tagging, bar coding, Bill of Lading
preparation, Garment on Hanger Shipments, direct to floor merchandise, pallet
specifications, contacts, purchase order guidelines, hazmat and back order
processing.
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Distribute your guide.
Print only the number of copies you require so
that each of the recipients can have access to the information appropriate for
their need to know. Make sure each Routing Guide has a clearly stated
security requirement clause and a clearly stated ramification for violations
that compromise your company’s competitive privacy. Copies in the wrong hands
are a potential security problem so you should know where every copy is at all
times. When a vendor informs you that your Routing Guide has been misplaced,
or even that parts are missing, be very concerned. The details in your
Routing Guide can be highly competitive information that should be easily
accessed by the ones who should have access, but not available to competitors
or to those who do not have a need to know. All too often, a vendor misplaces
a Routing Guide or has it open or available when a competitor to you is in the
office. Security can be a very difficult concept to manage.
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Create communications around your guide.
Mail each guide with a signed
delivery confirmation and a return receipt or fax acknowledgement form.
Follow this up with a telephone call to review aspects of the Routing Guide
where there might be confusion. Share comments about your Routing Guide with
users, particularly where they pertain to exceptions that can improve your
supply chain. Keep notes of these exceptions for addendums and future
updates. A signed confirmation is not just a security function. You need to
confirm that every vendor has the most recent edition of your Routing Guide
available for reference when it is time to make a transportation delivery
decision. The excuse that your Routing Guide was not available should not be
tolerated.
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Plan
to repeat this process in four months or consider simplifying the process by
taking it on-line.
Things
change and your Routing Guide is not a static process. You negotiate a lower
rate. You find a better transportation alternative. A carrier goes on
strike. A usual route or highway is closed or is prone to congestion or
accidents. There are many reasons to continually revisit your Routing
Guide. If you are working with old fashioned paper Routing Guides, you know
that this is also an expensive on-going compilation and printing expense. If
you have changed over to an electronic Routing Guide you can make changes as
they occur so your Routing Guide is always current, always secure, and always
ready for full compliance.
Disclaimer
The information presented herein
represents the opinion of the author(s) but not necessarily the opinion of
TransportGistics, Inc. nor is it presented as a legal position or opinion.
All content copyright by
TransportGistics, Inc. All rights are reserved. The author(s) of this article
retains the copyright to their article. No material may be reproduced
electronically or in print without the express written permission from the
individual authors and/or TransportGistics, Inc.
papers@transportgistics.com
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TransportGistics Products
Solutions
should not be more complicated than the problems they are trying to solve!
Generate, Distribute and Manage
Bills of Lading on the Web
Tracing and Tracking
information in a central location to all authorized users
Freight Bill
Management, Shipment Information, Cost Control Portal
Generate Return Authorizations via least cost
carriers, generate bar coded return Bills of Lading and facilitate the
receiving and accounts payable/receivable processes
Communicate
routing guides rules of engagement and carrier selection
Extend visibility & gain
accountability to the desktop by tracking shipments & goods
Additional Resources
Improve Inbound Routing And Vendor
Compliance
The management of inbound logistics represents the next significant
strategic initiative for leading companies
RoutingGuides.com
FreightTracing
TRaIDS.net
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