You order a camera lens from China and it arrives at your home in New York, in less than a month. How does this happen?
Trade networks today have the capability of transporting goods around the world at rapid speeds. What makes this possible are logistics carriers and carrier networks.
What is a Logistics Carrier?
For a camera lens to make its way from China to the United States there needs to be someone handling its transport. A company or person who is in charge of this transportation is a logistics carrier.
A logistics carrier will then be legally responsible for carrying the camera lens during the shipping process.
These carriers are also called freight carriers and can provide multi-modal transport services to get goods delivered faster. This means they can transport by land, air, and sea to reduce costs or transport special freight.
Logistics carriers work in two distinct ways. Some logistics carriers are common carriers or transporters for any individual entity or company.
Other logistics carriers are contract carriers. These companies and transport providers are bound to carry goods for certain shippers across a set time period. Contract carriers draw up agreements with particular companies and in doing so, cannot carry goods for other businesses.
Chances are that your camera lens made its way to you via a contract, common carrier, or even both depending on the shipping contracts and arrangements of the supplier.
How Do Carrier Networks Work?
Logistics carriers work through a complex network to get products like camera lenses from their point of origin to their destination. It all starts when a business or shipper tenders an order with a 3PL freight broker. The shipper will need to mention all the details about the order shipments. These shipments can be scheduled on a regular basis or in special circumstances.
After an order is tendered, the 3PL company then schedules and organizes delivery information in their transportation management system. The 3PL freight broker will engage with a large network of logistics carriers to get these orders delivered in a certain timeline.
The logistics carriers will need to work with insurance, hazard risks, handling requirements, and time management for all the orders. The order can only be dispatched once all these details have been checked.
The dispatch comes after these checks and the order is handed over to the carrier. The packages will then be loaded onto freight trailers or transport vehicles. The carrier will need to sign a shipper’s Bill of Lading (BOL). They assume responsibility for the package and are fully liable for problems in the delivery.
At this point, the carrier will then be in transit. In a well-connected carrier network, the freight broker will be in touch with the carrier throughout the journey.
After this comes the unloading, when the consignee will receive the package and sign the Bill of Lading. The 3PL will then receive Proof of Delivery documents and invoices for billing.
How Does A Carrier Determine Its Rates
Companies base their pricing model for full truckload on a per-mile basis. The farther you travel, the more expensive it will be. Extra charges, accessorials charges, are quoted independently of the per-mile rate. Doing so allows freight forecasters to weigh the benefits of multiple lanes to see what rate is best. Another thing to note about per-mile full truckload rates is that deadhead miles, which are “empty miles” when a driver needs to get back after making a delivery, are often included in the rate. So, to break it down. The rates include miles from delivering the shipment and the miles it takes for a driver to return.
Less-than-truckload (LTL), on the other hand, follows a different pricing structure. It depends on a hundred-weight and volume, and it is not as straightforward as a full truckload. This change is because LTL transports goods from multiple shippers, so there is much more involved. Full truckload deals with one shipper, while LTL deals with many shippers, meaning many inputs. Volume, Class, Commodity type, and weight all factor into these inputs.
Next up, we have air freight – companies price air freight per kilogram. Air carriers will charge in two ways: volumetric weight (dimensional weight) or actual weight. Whatever is more expensive of the two is what they will charge. Do keep in mind that each freight forwarder operates slightly differently from one another.
If you choose to move freight via rail container, they operate most similarly to truckload shippers, charging on a per-mile basis. In addition to transit costs, it is also essential to consider the cost of railcar equipment when using rail or multi-modal transit.
Ocean shipping is different from other modes of shipping in that the pricing model is per day. The average price worldwide has steadily increased year to year.
Advantages of a Carrier Network
Now that you have a grasp of how carrier networks work, you might be wondering—should all businesses join a carrier network?
The short answer is: yes. They should join a carrier network with a 3PL and expert carrier services. Here’s why:
Issues Are Easily Managed
There are a lot of things that can go wrong during shipments. The weather can be volatile, the trucks can breakdown in the middle of their routes, or unanticipated checkpoints or delays could pop up at the last minute. If you have a business and join a carrier network, these will not be your headaches. A 3PL will take care of all the scheduling, planning, and re-booking in case anything goes wrong.
Communication is Efficient
A 3PL provider will update progress and track communication between the carriers, suppliers, and customers to make the delivery and transport more efficient.
The carriers connected to the 3PLs will keep in touch via phone or GPS to track progress along the way. If they encounter a problem on the road, the 3PL will know immediately and send help for the current carrier or replace it with another one.
Enhanced Service
Happy customers should be the primary goal of your services. Hiring a reliable logistics provider should be responsible for that. The client retention rate will increase when carriers stick to their estimated pick-up and delivery timeframes and communicate well with customers throughout the shipment process.
Cost Savings
Perhaps one of the best benefits of having a stellar logistics provider is that they can save you money in the end. They can work with their clients to develop an effective dollar-saving strategy, like consolidation programs, network reconfiguration, and efficiency improvements. Whether you combine those or look at them individually, they can reduce costs substantially.
Network Strength
A logistics carrier can adequately assess whether certain carriers meet their specific client’s needs. This assessment can be an overly time-consuming task, but a professional logistics carrier will take care of that. They already have an existing web of carriers they work with and may have insight specific to the needs of an organization that wouldn’t be available otherwise.
How Technology is Changing the Future of Carriers
Transportation Management Systems (TMS)
TMS systems manage carriers and optimize carrier route automation and are increasingly popular, which makes sense. Many technological tools require organization and management in one commonplace. It helps track delivery drivers in real-time, lowering freight expenses, increasing transparency, and improving overall customer satisfaction scores.
Self-Driving Vehicles
Advancements in actual transportation affect carrier networks, and as we have seen a rise in self-driving automobiles, we see a rise in the same for logistics. A few years back, only very well-to-do companies could make this a reality but looking ahead to the future, it may be feasible for all.
Drones
Believe it or not, companies use drones to expedite shipping. Drones allow shipment companies to reach remote locations far easier and quicker than traditional modes of transportation. This advancement has generated quite a buzz in the industry and will likely see an uptick in the coming years.
Skills That Define a Successful Logistics Carrier
Teamwork
When it comes to skills that a logistics carrier must possess, teamwork is at the top. Collaboration and communication within your team across many different departments guarantee that projects are always on track. When speed and quality are essential aspects of the business, working harmoniously together is crucial.
Customer-Centric
The end destination, and the client that comes along with that, is always what logistics companies see as most important. Managing customer relationships and improving upon them is a goal that companies are always after.
Organized
As would probably be assumed, logistics companies are incredibly organized. It is essential to the business. Planning, scheduling, and delivering goods on time is a skill and paramount for any logistics company.
Conclusion
A 3PL, a carrier, and a supplier, all collaborate to get your camera lens from China to the United States. Without them, your camera lens would still be at the factory. Logistics Carrier Networks are then essential for every good you consume.