Sage Advice: Evaluating and recognizing carrier performance is critical for success

Logistics Management’s 28th Annual Quest for Quality Award winners were announced in the August edition of Logistics Management magazine. On October 5th, Michael Levans, group editorial director for LM presented the awards to the winning companies on the last evening of CSCMP’s annual meeting in Philadelphia. Congratulations to the winners, and thanks to all of the shippers and receivers who took the time to select the carriers and rank them based on their service performance.

Every time I read stories about recognizing carriers for overall excellence I think about carriers that I held in very high esteem, but traditionally didn’t make the Quest for Quality list or other recognition lists. The reasons are numerous. Certainly the size of the carrier makes a difference, as well as what groups within the company measured the carriers. Then there are the criteria to be considered and how the scores are weighed.

This article and its rankings are not about whether the winners deserved being best in class. Rather it’s about the importance of the effort that your teams should be putting into the evaluation and recognition of your carrier base. It is a well-known fact that inspection brings opportunities for improvement, and recognition is a vital impetus to excellence.

Initially, I recall doing performance reviews by myself that were focused on “service performance,” as this generated the highest degree of visibility in our company. Over time, and as the “quality process” emerged, it became clear that the internal customers of the transportation process were numerous and included customer service; contract and rate departments; dispatch teams that tendered loads, handled turnbacks, expedited shipments, and rescheduled late deliveries; warehouses that loaded the trailers and needed to ensure the safety of equipment and personnel on and around the loading docks; freight payment and claims teams; and finally the transportation management team.

The challenge then became how to involve all of these teams. We needed to decide what each group wanted to measure; how it would be measured; how the parties would participate; the frequency of the reviews; where the reviews would be held; the weighting for the final score; and how this would be presented to the carriers.

Suddenly this “carrier evaluation process” appeared to be a big project, and there were questions about the overall value of doing performance reviews. Could the in-depth review be done only with quantitative measurable data? Or was there value in collecting subjective feedback that could be open to bias and personality conflicts.

In the end, all internal company teams willingly participated, some with quantifiable information and others with some simple assessments of whether or not a carrier company was helpful or a hindrance.

For example, questions were prepared to allow teams to rank carriers from 4 to 9 on how well they solved process problems, responded to information requests, and provided quality information the first time. Teams suddenly found it easier to do both quantitative and subjective evaluations and develop a numeric performance profile for the carrier at each plant and distribution center.

In subsequent articles I’ll share information about what each of our groups measured and how we weighted the overall score. But, we quickly destroyed a commonly held view that a carrier that excels in one area of the country operates with the same excellence across the country. That’s simply not true, and we pursued a program that rated and recognized carrier performance regionally—or by plant and distribution center—and not nationally.

The annual and public recognition of carriers and their successes must be a vital part of your carrier management program. Not only does it drive consistently exceptional performance across all functional areas, but it also sends a clear signal about your company’s interest in investing in your carriers and the industry. Don’t let a few budget dollars preclude measurement and recognition.