5 Of The Best Ways To Establish Relationships With Direct Shippers
Tired of paying broker fees and cutting rates to compete on load boards? Here are the best ways to establish relationships with direct shippers.
As a carrier, your primary responsibility is to move freight. To meet that goal, you need customers—and whether you’re an owner-operator or a fleet owner, you’ll find those customers wherever you can.
Often, that means working with a freight broker, a third-party agent who connects shippers (your customers) with carriers (your trucking company). Some shippers only work with brokers; they may be daunted by contracts, or want a flexible rate, or need access to a huge network of carriers rather than relying on a single fleet of half a dozen trucks.
So not all shippers are willing to establish direct relationships with carriers. Other shippers, however, prefer the consistency and predictability of that direct shipper-carrier relationship. And for trucking companies, these direct relationships with shippers carry distinct advantages:
- You negotiate rates with direct shippers. That’s not always possible through a broker.
- Contracts with direct shippers ensure steady, reliable work for your company.
- Direct shippers will let you know what equipment their loads require, which can help you make purchasing decisions.
- Planning loads is usually easier when you have access to the shipper. You can ask about their dock (appointment only? First-come, first-served?) to prevent delays. You can discuss the drop trailer situation. It’s better to know all that before your driver sets out for the job, and brokers can’t always provide that information.
- Your business relationship is more flexible with a direct shipper. Maybe you can offer a rebate in exchange for more work—or maybe you need to increase the rate due to unforeseen delays. With a direct shipper, you can at least discuss these changes.
If that all sounds good, start working toward these direct partnerships. Here are a few of the best ways to establish a relationship with direct shippers.
The 5 Best Ways To Establish Relationships With Direct Shippers
1. Learn shippers’ requirements for their contract carriers.
Say you have a Target distribution center just a few miles away from your fleet headquarters. A Target contract could set your business up for the long haul. But before you base your business plan around getting that contract, you need to do some homework.
Large shippers—the types that contract directly with carriers—often have detailed requirements for the trucking companies they work with. They may require a certain number of trailers and a separate number of trucks. They may only work with companies that own specific types of equipment.
Learning these requirements can help you plan for business growth. Maybe you can’t get that Target deal today, but you can plan to expand your fleet over the next few years with the goal of making that deal in year five, for instance.
The best way to learn about shipper requirements is to ask. Reach out to the shipper, get to know what they need, and start making goals. This market research will pay off in the long run.
2. Connect through a load board.
Like many business relationships, shipper/carrier partnerships often start with a one-off job. As we’ve mentioned in other posts, load boards are often the first place fleet owners go to find work.
A load board is an online marketplace that matches direct shippers, trucking companies, and brokers on a load-by-load basis. Shippers and brokers post the freight they need moved. Trucking companies post their capabilities and routes. They message each other through the load board and deals are made.
Of course, you have to spend money to make money: The top load boards charge monthly fees for unlimited access. Check out sites like DAT (where a standard carrier plan runs $39.95 per month) or Truckstop.com ($39/month for basic access) to find loads.
Keep track of the shippers you work with through these load boards, and if things go smoothly, reach out directly. With great service, any of these one-off jobs could grow into a steady direct partnership.
3. Work the phones to secure local contracts.
Grassroots direct marketing can be surprisingly effective in the trucking industry. Build a list of potential shippers in your town, or within a 100-mile radius or so. Then pick up the phone, which we’ve found more effective in this industry than email spam. Ask for a warehouse manager, or, better yet, research the company beforehand to find out who’s in charge of the shipping operation.
Explain your services or ask if they’re having any logistics challenges you might be able to solve. Even if the answer is no, you can leave your contact information; shippers may reach out later, when they’re in a bind.
Cold calling is hard, often discouraging work. But if you keep at it, this old-school approach to marketing can lead to long-term partnerships with direct shippers.
4. Cooperate with your competition.
Other trucking companies aren’t just your competition; they’re also a valuable community that shares your goals. Small and medium-sized carriers can only handle so much work. Rather than simply declining a request from a shipper, many fleet owners would rather offer a referral.
Join trade associations, go to industry events, and network with the carriers in your area. Get to know the owners of nearby trucking companies. That could lead to referral agreements; if you can’t take a job, you’ll recommend a competitor—and they’ll return the favor. A personal referral goes a long way toward establishing the trust you need to turn a one-time load into an ongoing direct partnership.
5. Be pleasant.
The trucking industry is stressful. Everyone’s in a hurry. Shippers blame carriers for delays, while drivers grit their teeth at slow docks. In this high-pressure environment, a little human kindness can really make your company stand out.
Treat others well. Remember names. Do what you say you’re going to do. When shippers love to work with you, they’re more likely to reach out for a second job—and a third, and eventually, maybe, year-round work.
Managing Finances While Building Relationships With Direct Shippers
With long-term customers, you might bill directly. As you take jobs in the hopes of building ongoing partnerships, however, it’s often more cost-effective to go through a factoring service.
Billing relationships require terms, contracts, and other time-consuming paperwork—and shippers may not be willing to go through all that rigamarole for a carrier they just met.
Factoring companies provide financial services for the trucking industry. They pay your invoices quickly—within a day or two at Bobtail—so you don’t have to wait weeks or months for a payment. They also simplify your accounting, handling your billing and collections through their own relationships with shippers. Best of all, they reduce the risk of working with new customers; they’ll pay your invoice and collect from the shipper themselves.
Bobtail offers a simple, no-strings-attached approach to factoring trucking invoices. Unlike traditional factoring companies, we don’t make you sign restrictive contracts. We don’t charge any hidden fees. You can factor one invoice and collect directly on the next; it’s all up to you.
It’s not enough to know the best ways to establish relationships with direct shippers; you also have to manage your business well throughout the process. Invoicing with Bobtail can help.