Evaluating a new shipping lane comes with a lot of thought and planning. Here are five questions to ask yourself before you add a shipping lane to an existing transportation network.
- Can it put us closer to our customers? Bridging the geographic divide between fulfillment centers and customers is top of mind for everyone right now. A retailer that wants to be able to ship from store-to-store in order to fulfill faster, for example, should consider a new trade lane and/or mode. Or, If the trade lane in question doesn’t help you bridge this gap, consider other options.
- Will we be able to save money? Shippers need to keep a sharp eye on their bottom lines. Combine this with customer demand for free shipping and you get a recipe for profit loss if you don’t pick the right carriers, trade lanes, and shipping options. Before you jump into a new geographic region, explore the costs of shipping to and from that area, carefully consider your options, and always factor in the total landed cost (i.e., the total price of a product once it has arrived at the customer’s door) of your shipments—not just the quoted freight costs.
- Can the new lane help us fulfill orders faster? Everyone has come to expect next-day and two-day shipping—a reality that puts a lot of pressure on the fulfillment process. According to one recent survey, fast order fulfillment that happens in two days or less is both a top focus and a primary competitive challenge for transportation executives right now. If the lane you’re considering doesn’t enable quicker fulfillment, keep looking.
- Are we going to have enough drivers to work with? For companies that are located off the beaten path, or that have difficult freight to service, they need to ensure carriers that are available. By expanding into more populous regions or strategic locations that help with transportation times—either by taking on a new customer or working with a new distributor there—shippers can access more active trade lanes and offset at least some of the effects of the capacity crunch.
- Are we going to have data to evaluate the lane? You’ll want to test out your new shipping lane and see how well it operates before going all-in on this new initiative. Be sure to have your metrics for success before you start shipping on a new lane, so you can evaluate performance during your pilot program.
By taking the time to answer the questions outlined above, and carefully considering the pros and cons of expanding into that new lane, you’ll be well prepared to manage any challenges and leverage any opportunities that it presents.
Whether you’re adding new lanes or finding your next freight partner, consult our guide to developing a freight transportation strategy.