Let’s face it: as human beings, none of us like being rejected. Be it in our personal or professional lives, there are few emotions that are less desirable than a sense of rejection. Unfortunately, in the U.S. transportation industry, Full Truckload shippers experience “Rejection Anxiety” every time they tender a load to a carrier. That fear comes from knowing that any tender request is subject to refusal by a carrier, with little or no explanation as to why.
In previous posts, we have discussed the importance of the network effect and having immediate access to a large community of carriers. We have also shared ways shippers can enhance Request for Proposal participation rates. While these are two very important elements of a successful FTL program, their value can be discounted when, in the moment of truth, the carrier turns down a tendered load.
Apart from constantly worrying about loads not being accepted, the impact of repeated tender rejections on a company’s operations can be particularly damaging. From missed delivery dates to upset customers and cost increases, load rejections are one of the biggest issues shippers have to contend with.
Given the negative outcomes associated with load rejections, here are five suggestions on how shippers can positively impact their tender acceptance rates.
Improve market sensitivity through multiple bids per year.
One of the biggest reasons why loads get rejected is due to changes in market conditions that occur from the time an agreement is reached to when shipments are actually tendered. This is especially so when shippers do once-per-year bids, and market dynamics shift multiple times during a twelve-month period.
The solution to this problem is to request bids more frequently. This gives shippers a more accurate window into what their real volumes will be during a shorter time period, and carriers will be in a much better position to determine competitive pricing, as well as allocations of equipment and drivers.
Based on the above logic, executing multiple bids over shorter time periods enables reality-based planning/pricing for both shippers and carriers, resulting in fewer load rejections.
Be specific about service expectations.
Whether a shipper is working off of contract rates or the spot market, carriers are less likely to reject loads if they know they’re dealing with accurate and complete service requirements. That means not only providing details in advance on factors like live load/unload, driver assists, etc., but also not deviating from those requirements after a carrier commits equipment and drivers.
This is one area where a procurement technology platform can help. Easy-to-use bid and spot rate templates allow shippers to provide all details related to their service expectations. When carriers see adequate information is present from the get-go, they’re less likely to reject a tender request.
Establish a good track record with carriers.
Over time and based almost exclusively on behavior, carriers know which shippers to steer clear of. A continuation of the above point, shippers not only have to provide specifics on service requirements, they have to hold up their end of the bargain when freight is ready to move. That means honoring appointments and avoiding excessive wait times; it also means not changing the terms of a load when a driver is on-dock and ready to go.
In a market where demand for equipment exceeds supply, carriers will only accept tender requests from problematic shippers once all the “good freight” has been taken. Conversely, when shippers earn a reputation for being reliable, easy to work with, and respectful of a carrier’s time and effort, the likelihood of tender rejections goes down.
Measure Load Rejection Rates as a KPI.
Two founders of the technology company HP (Bill Hewlett and Dave Packard) famously said, “You can’t manage what you don’t measure.” Consistent with the HP philosophy and with load rejection rates such a critical factor, it must be measured as a Key Performance Indicator.
By calculating the Tender Acceptance Rate on a carrier-specific basis, shippers can not only see what the performance is, but can use data to (a) inquire with carriers as to why the KPI is high, low or normal, and (b) work collaboratively with truckers on what can be done to improve performance in this all-important area.
Without question, tender rejections will go down when shippers and carriers agree to work together to improve operations and find real ways to fix issues.
Provide positive feedback to carriers.
Ask truckers what type of feedback they get from shippers, and oftentimes it’s, “We’re only as good as our last load” or “We hear about the bad stuff, but never get kudos for when things go right.” As trivial as it might sound, a positive vibe goes a long way, and when combined with the previous four suggestions, a kind word might be the difference between future loads being accepted or turned away.
While it is essential that shippers and carriers have professional conversations on sub-par performance, and more importantly, ways to mutually get better, carriers like positive reinforcement as much as everybody else does. Whether it’s in a formal Quarterly Business Review or just a quick text to say “thank you,” a compliment for a job well done not only acknowledges current performance, it can also increase future Tender Acceptance Rates.
Rejection is a fact of life, but it doesn’t mean it has to find its way into the Full Truckload shipping industry. This is especially true because shippers can influence how carriers view their business, as well as work collaboratively with them to increase Tender Acceptance Rates. The really good news is that by combining features of a freight procurement platform with operational discipline and the occasional “shout out,” shippers can be done with FTL Rejection Anxiety!
Debra N. Phillips is Manager of Marketing for Emerge. She began her career in transportation in 1989 as Manager of Public Relations for Carolina Freight Carriers. Throughout her career, she has held leadership positions in companies including FedEx Freight, Penske, and MercuryGate. She has a solid track record of competitively positioning products, services, and technologies to enhance reputation and brand, and accelerate revenue growth.