Transforming Transportation Risk into Protection

Learn from shippers who implemented best practices to achieve success - Maximum benefit from Carrier Risk Management is within your reach!

Transportation risk management is too important to your company’s financial well-being to be jeopardized by potential inattention from transportation operations.

We have observed certain transportation operations that are so busy with last-minute arranging and dispatching of day-to-day shipments that risk management is ignored.

If they are incented only by getting shipments delivered on time, risk management can be viewed as counterproductive and the risk management software will quickly fall into disuse!

These mini-Success Stories clearly indicate that most companies implement in their day-to-day transportation operations – those responsible for all carrier management functions.

Further, they show that centralized command and control with the ability to instantly “turn-off” a carrier that could cause jeopardy is the way-of-working (whether that is communicated directly or activated in the system that is employed for tendering).

We believe that this is the most effective implementation and an observed best practice. When Shipper Shield is implemented, you should develop a base of information customers to achieve maximum effectiveness in your organization. First, communicate the value of Shipper Shield to as many people as possible in your organization – not just transportation.

These include: inbound transportation (if managed separately from outbound), transportation procurement (regardless where this resides in your company) for pre-buy and renewal evaluation, freight claims (to evaluate risk, particularly with large outstanding claims balances), sales and customer service (for relationship management), legal and risk management, and quality assurance and reporting (responsible for 6 Sigma and ISO certification).

You must develop procedures to investigate and adjudicate issues. All issues are not created equal, and not all reported issues impact your operation. You must determine which issues require immediate action and which are not significant (e.g., the example of a carrier’s brokerage authority expiration when that shipper did not use that carrier as a broker).

Map out a follow-up action plan and consequences for each event. Establish your in-company information dissemination networks and audit your processes to ensure directions are being followed, particularly by auditing carrier usage against the Shipper Shield database (comparing the accumulated freight bill or BOL file).

You must understand how liability attaches to your organization and what practices you must implement to protect yourself. Your overall objective is to understand where you have liability from the actions of others – carriers or brokers.

When you contract any Carrier Risk Management system, you must carefully consider your implementation. Active Scout will work with you to determine the best ways for you to derive maximum benefit from our software, but you must think about your organization, its ways-of-working, and its information needs.

Download the White Paper: Managing Your Transportation Risk

Success Stories

A Fortune 500 Producer of Consumer Packaged Goods (primarily beverages) controls over 300 facilities from its centralized logistics command center. They perform centralized rating, routing, and carrier procurement for their distributed operations. They intensely use a small number of mission-critical carriers (80% of their freight goes to 30 carriers).

This shipper uses Shipper Shield in many ways in their organization. Transportation Analysts determine which carriers to use and not to use, based on Shipper Shield scores, then implement those decisions in their centralized operation, which directs facility usage. If there is an issue with a carrier, they evaluate the criticality of the issue and determine appropriate next action. (For example, if the issue is a minor maintenance problem, the carrier is not penalized; if the issue is a driver safety problem, they follow-up with the carrier to determine what resolution the carrier has implemented.)

Monthly, this shipper generates carrier report cards that are shared and reviewed with their carriers. Data points include the Shipper Shield safety metrics in addition to the standard metrics of: volume managed, tender acceptance percentage, on-time delivery, freight bill accuracy, and claims volumes.In addition, Shipper Shield is employed as a key part of the process when they are in the procurement process — either evaluating new carriers or renewing contracts. The Claims Management function employs Shipper Shield to assesses their risk versus outstanding claims volume (ensuring that the carrier’s claims volume does not go out of proportion to their financial stability).

Currently, they do not compare the Shipper Shield database against the freight bill file to determine compliance-to-plan, but intend to employ this feature in the future. They believe that Shipper Shield is extremely cost-effective and a valuable component of their overall carrier management process.

A Global Supplier of Ink and Coating Products monitors approximately 60 carriers and develops a report card on each. Due to their requirements, they use a majority of small and regional LTL carriers that provide better service and perform value-added services for them.

Prior to Shipper Shield, they tried to monitor key carrier contract and safety issues manually, but found the process cumbersome and time-consuming. With Shipper Shield, they have not made drastic procedural changes, but monitoring is now much easier.

They concentrated on key issues — and not all issues are critical. Although they have multiple carriers that are deficient in one or more areas, they develop a holistic picture on the carriers (in essence, a report card) and address issues that pose jeopardy. (For example, they were alerted that one of their carrier’s brokerage authority had expired — this was not an issue for them since they did not use that carrier as a broker.)

When an issue is identified, they communicate to the carrier and expect an improvement program, action plan, or specific response. (One carrier that had a driver safety issue responded that they had already fired the problematic driver.) They believe that the good carriers are monitoring their own ratings, establishing improvement programs, and chartering internal staff to respond to shippers’ inquiries.

As with the previous case, they evaluate issues and determine the severity. They believe that the DOT scoring is not always fair to the carriers — particularly on vehicle inspections. (DOT weighs all issues equally, regardless of how serious they are.)

In addition to day-to-day carrier management, the Purchasing department employs Shipper Shield in carrier procurement — new evaluations and contract renewals. Their Risk Management department relies on transportation operations to manage carrier contracts and risk, but the carrier performance data is retained and forwarded to the Quality department for usage in their ISO 14000 reporting.

They believe that Shipper Shield is a valuable component of their overall process and it allows them to make responsible decisions for their corporation. They also believe it is a great value, has enjoyed good success, and significantly reduces clerical effort (versus their previous method of monitoring).

The industry-leading Manufacturer of Aluminum Extrusions monitors approximately 150 carriers (primarily specialized) to ensure safety and professional cargo management. Three people in their centralized traffic operations monitor carrier safety and performance. When circumstances dictate, they have the ability to deactivate a carrier and have that order immediately implemented throughout their network.

They believe that the color-coded dashboard gives them an immediate overview of all of their carriers’ status and any changes that occur. This function makes compliance checking quick and easy.

If a carrier “is in the red” for any reason, they follow-up immediately (either from the plant level, if the carrier is local to that plant or from their centralized traffic operation). As with the others, they work through issues with their carriers and have developed an issue adjudication process that ensures they only use safe carriers to deliver their handling-sensitive product.

They believe that, at minimum, they have saved one clerical person who formerly did this job manually. They have stated that the cost-benefit was immediate and effortless.

Most shippers and manufacturers do a poor job of vetting the carriers they use - so tread carefully!

Download the White Paper: Managing Your Transportation Risk

Article Topics

Active Scout Technologies News & Resources

Rise in Freight Costs is a Predictable Surprise
When It Comes To Transportation Accountability, FMCSA Administrator Anne Ferro Is Right!
Supply Chain Risk and the Planning Process
How Supply Chain Buffers Can Mitigate Risk
Managing Your Transportation Risk
Transforming Transportation Risk into Protection
Understanding Your Vendors’ Certificates of Insurance
More Active Scout Technologies

Latest in Supply Chain

Supply Chains Struggle to Access Reliable Emissions Data from Suppliers
Artificial Intelligence to Drive M&A Activity in Supply Chain
Cleo Announces New Supply Chain Management Tools for Integration Cloud Platform
ASCM Honors Supply Chain Management Leaders with Awards of Excellence
US Container Traffic Boosted by Back-to-School Rush
Bank of America Introduces Digital Supply Chain Finance Platform
Moody’s: Carbon Offsets Open Supply Chains Up to Financial, Reputational Risks
More Supply Chain

The Active Scout Technologies’ team is comprised of transportation risk management experts that have refined the carrier monitoring and selection process. Through the company’s newest product, Shipper Shield™, shippers’ have found the resource that allows them to monitor their supply chain risk through holistic oversight, and provides the education to make decisions to eliminate exposure and engage in safe ‘next’ practices. Active Scout was perfected by the same leadership team that successfully created and manages sister company, TranzAct Technologies, Inc. TranzAct Technologies has provided freight audit and payment, logistics services and technology to shippers for over 30 years.

View Active Scout Technologies company profile


Featured Downloads

Becoming a Shipper of Choice
Becoming a Shipper of Choice
C3 solutions' scheduling software streamlines the shipping process.
Thinking Differently About Supply Chain Planning
Thinking Differently About Supply Chain Planning
Political landscapes shift overnight, global trade is constantly changing, consumers demand increasingly personalized service and smaller day-to-day challenges hit without warning. If...

Rapidly Improve the Performance of Your Warehouse Logistics
Rapidly Improve the Performance of Your Warehouse Logistics
The Rapid Performance Evaluation identifies opportunities and potential improvements in every aspect of warehouse logistics operations; performance, productivity, service, quality, and systems.
Resource Management System (RMS): How to Effectively Leverage Your Assets
Resource Management System (RMS): How to Effectively Leverage Your Assets
This guide provides an in-depth analysis of the potential of various resources available in a warehouse and how they can be utilized...
Sustainable Supply Chain Insights From PITT OHIO
Sustainable Supply Chain Insights From PITT OHIO
A whitepaper on supply chain insights gleaned at the LEED-certified gold Cleveland transportation and sustainability summit.