CLDA Final Mile Fridays with Richard Whitlock, President of CX Logistics
For many local and regional final mile carriers, business development means finding more shippers.
But there’s another source of business carriers shouldn’t overlook: third-party logistics providers (3PLs).
National 3PLs are actively pursuing business across the country. When they win that business, they need strong local and regional carriers to help execute it. For carriers, those relationships can open the door to larger opportunities without requiring them to build a national footprint of their own.
On a recent episode of CLDA Final Mile Fridays, Richard Whitlock of CX Logistics shared what his company looks for in carrier partners and how regional carriers can position themselves for more opportunities.
Here are some of the biggest takeaways.
3PLs Can Extend Your Sales Reach
There’s value in developing direct relationships with shippers, but pursuing large national accounts requires resources that many regional carriers may not have internally.
A national 3PL may already have the sales team, customer relationships, technology and infrastructure needed to pursue and manage those accounts.
CX Logistics, for example, has a national sales team of approximately 15 people pursuing business across the country. As those efforts create opportunities in different markets, CX relies on regional carrier partners to execute the work locally.
That creates another path to growth.
Instead of trying to build operations everywhere, carriers can focus on being exceptional in the markets they already serve while developing relationships with 3PLs that have broader reach.
You don’t necessarily need a national footprint to participate in national business. You need the right partnerships.
What Do 3PLs Look for in Carrier Partners?
When a 3PL selects a carrier, it is trusting that company to execute commitments the 3PL has already made to its customer.
That means the decision involves more than simply finding someone who can move the freight.
When CX evaluates potential carrier partners, it considers factors including:
- Operational capabilities
- Financial stability
- Technology
- Customer service
- Communication
- Reputation and industry relationships
Size isn’t necessarily the deciding factor.
A smaller regional carrier with the right capabilities may be a better fit than a larger company that can’t successfully execute the specific scope of work.
For carriers looking to attract 3PL business, the opportunity is to demonstrate not only what you can deliver, but how reliably your organization can support the larger customer relationship behind that delivery.
The Cheapest Carrier Doesn’t Always Win
Price matters. A 3PL still has to develop a competitive solution that can win the shipper’s business.
But the lowest rate doesn’t automatically win.
When several qualified carriers are relatively close in price, CX considers which carrier it believes can best execute the work. Financial stability also matters.
Pricing an opportunity too aggressively may help win the business initially, but if the rate isn’t sustainable, it can create problems later for the carrier, the 3PL and ultimately the customer.
The goal isn’t simply to win the business. It’s to build business that everyone can sustain.
From Carrier to Partner
Winning the first opportunity is only the beginning.
There is a difference between being a carrier that receives work from a 3PL and becoming a partner the 3PL actively wants to grow with.
Performance, technology, customer service and communication all help build that trust.
And nothing tests a partnership quite like something going wrong.
A driver gets a flat tire. A delivery is delayed. An instruction gets missed. Problems happen in transportation.
A strong carrier partner communicates quickly, provides accurate information, is transparent about what happened and, whenever possible, brings a solution.
That matters because the 3PL has its own customer waiting for answers.
The same principle applies when things are going well. An initial opportunity might involve only one route, customer or market. Consistently execute the work, communicate well and make it easy for the 3PL to trust you with more.
CX has seen carrier relationships grow from one location into additional cities or states.
Do a great job with the business you have, and you give your 3PL partner a reason to look for more business you can handle.
Build the Relationship Before the Opportunity Arrives
If 3PLs can be a source of new business, carriers need to make sure those companies know who they are before an opportunity comes along.
When CX needs a carrier partner in a market, Whitlock said the company turns to the CLDA network first.
For CX, that isn’t simply about finding a company in a directory. Relationships and industry involvement matter.
Meeting other operators face-to-face gives 3PLs and carriers the opportunity to understand each other’s businesses and capabilities before there’s an immediate piece of business on the table.
Whitlock also noted that seeing a carrier invest its time and resources in CLDA and attend events such as the Final Mile Forum can carry weight when CX is evaluating potential partners.
That doesn’t replace due diligence. Carriers still need the right capabilities, technology, financial stability, service and pricing.
But when a 3PL suddenly needs coverage in your market, there’s an advantage to already being someone they know and trust.
Don’t wait until you need business to start building the relationship.
Make 3PLs Part of Your Growth Strategy
Working with 3PLs doesn’t mean carriers should stop pursuing shippers directly.
It means adding another channel to the business development strategy.
Get to know the 3PLs that are selling nationally and looking for reliable regional partners. Understand what they need. Make sure they understand your capabilities. Build those relationships before the opportunity exists.
Then, when the first opportunity comes, don’t simply treat it as another piece of business.
Treat it as an opportunity to become the carrier they want to call again.
Your next major opportunity may not come directly from a shipper. It may come from a 3PL that already has the customer and needs the right carrier in your market.
Will they know who to call?
Watch the Full Conversation
Watch the full CLDA Final Mile Fridays conversation with Richard Whitlock of CX Logistics for more on building successful 3PL relationships, what CX looks for in carrier partners, pricing, communication and turning one opportunity into more business.
Watch the full conversation on YouTube.
CLDA Final Mile Fridays brings together industry leaders and experts for practical conversations about the issues affecting final mile businesses. Follow CLDA for upcoming episodes and conversations designed to help move the final mile industry forward.
The information shared in this article and the accompanying Final Mile Fridays conversation is intended for general educational purposes and should not be considered legal or insurance advice. Companies should consult with their own insurance, legal and risk-management professionals regarding their specific operations.
